Think Your Home Insurance Will Protect You During Renovations? Think Again.
A fresh kitchen, a new addition, or even a major remodel can be exciting — but what many Canadian homeowners don’t realize is that their standard home insurance often won’t cover them during major construction.
In fact, if your home is vacant for more than 30–60 days or you’re making structural changes, your insurer may suspend or severely limit your coverage. Without the right policy in place, you could face a claim denial worth tens (or hundreds) of thousands of dollars.
Why Home Insurance Changes During Construction
Renovation and construction increase risks far beyond what a standard home policy is designed to handle:
- Fire hazards from temporary wiring, open flames, or welding.
- Water damage from exposed plumbing, roof removal, or unfinished exteriors.
- Theft or vandalism targeting building materials, tools, and appliances.
- Liability exposure for injuries to tradespeople or visitors on-site.
Because of these risks, insurers re-evaluate your policy once major construction begins. If the risk profile changes too much, they may exclude certain coverages or cancel the policy entirely unless you switch to a renovation-specific option.
Common Policy Exclusions During Renovations
Every home insurance policy is different, but here are some of the most common limitations Canadian homeowners face:
- Vacancy clauses — If your home is empty for more than 30–60 days, certain coverages (including water damage and vandalism) are suspended.
- Structural alteration exclusions — Damage that occurs during major construction is often excluded unless reported and endorsed.
- Material theft limits — Stolen building materials on-site may not be covered under standard contents insurance.
- Construction peril exclusions — Perils like collapse, foundation shifting, or construction errors may be excluded without a specialized policy.
The Coverage You Actually Need
For uninterrupted protection, you’ll need one of these short-term, project-specific policies:
Builder’s Renovation Insurance
- For homes that remain occupied during renovations.
- Covers the existing structure and the renovation area.
- Protects building materials stored on-site.
Course of Construction (COC) Insurance
- For vacant homes, major rebuilds, or new builds.
- Covers the structure, materials, and labour value until completion.
- Often required by lenders and municipalities.
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Real-World Claim Scenarios
Scenario 1 – Denied Claim Under Standard Home Insurance
An Ontario homeowner vacated their home for a four-month kitchen and main-floor renovation. A burst pipe during winter caused $60,000 in damage. The claim was denied due to the vacancy clause in their standard home policy.
Scenario 2 – Approved Claim With Builder’s Renovation Insurance
In BC, a homeowner stayed in the house during a $120,000 remodel. An electrical fire caused $45,000 in damage. The claim was fully covered because they had the proper Builder’s Renovation policy in place.
Lender and Legal Requirements
- Mortgage lenders often require proof of COC or Builder’s Renovation insurance before releasing funds.
- Some municipalities require proof of construction coverage when issuing building permits.
- Lenders may be listed as a loss payee, ensuring their interest is protected in the event of a loss.
How to Protect Yourself
- Notify your insurer before any major renovation.
- Clarify occupancy rules — know when your home is officially considered vacant.
- Ask about exclusions and get answers in writing.
- Switch to the right policy — COC for vacant projects, Builder’s Renovation for occupied builds.
The Bottom Line
Your home insurance is built for everyday living, not active construction.
If you want uninterrupted coverage — and to avoid costly claim denials — get the right construction insurance before work begins.
🔨 Don’t start without protection.
Get your construction insurance quote today
