Planning a Build or Major Renovation? Budget for Insurance First
Whether you’re building a custom home, adding a second storey, or renovating your kitchen, you’ll need more than a contractor and a building permit — you’ll need the right insurance in place before construction begins.
Standard home insurance won’t cover you during major construction. Instead, you’ll need either Course of Construction (COC) insurance — also known as Builder’s Risk — or Builder’s Renovation insurance.
The cost depends on your project type, location, and scope. Let’s break it down.
What’s the Difference Between COC and Builder’s Renovation?
Course of Construction (COC) Insurance
- Covers vacant homes, new builds, and major rebuilds.
- Protects the structure, materials, and labour value against perils like fire, theft, vandalism, and weather damage.
- Often required by lenders and municipalities.
Builder’s Renovation Insurance
- Covers occupied homes during substantial renovations.
- Protects the existing structure and the renovation area.
- Includes coverage for stored building materials on-site.
Why Costs Vary Across Canada
Several factors influence your premium:
- Project Value — Higher build values = higher premiums.
- Location — Urban areas may face more theft risk, rural areas may face longer emergency response times.
- Coverage Term — 3 months vs. 12 months makes a difference.
- Occupancy — Vacant properties are higher risk.
- Coverage Add-Ons — Soft cost coverage, flood/earthquake endorsements increase cost.
- Deductibles — Lower deductibles mean higher premiums.
Typical Price Ranges in Canada
Below is a quick-reference comparison of average Canadian premiums for common projects.
| Project Type | Policy Type | Typical Premium Range | Example |
| Small Kitchen or Bathroom Reno | Builder’s Renovation | $350 – $600 | $40K kitchen update while living in home |
| Main Floor Remodel + Addition (Occupied) | Builder’s Renovation | $500 – $800 | $150K addition, homeowner stays on-site |
| Detached Garage Build | COC | $300 – $800 | 2-car insulated garage with electrical |
| Laneway or Garden Suite | COC | $800 – $1,500 | New 600 sq. ft. unit with full plumbing |
| Second-Storey Addition (Vacant Home) | COC | $1,200 – $2,000+ | Full roof removal, new floor construction |
| Custom Home Build | COC | $1,500 – $2,500+ | 2,500 sq. ft. new build, 9-month term |
Example Scenarios
Scenario 1 – Occupied Reno
You’re adding a $75K basement suite in Ontario and living upstairs.
→ Builder’s Renovation Insurance ~ $500 for 6 months.
Scenario 2 – Vacant Addition
You’re adding a $200K second storey in BC and living elsewhere.
→ COC Insurance ~ $1,800 for 9 months.
Scenario 3 – New Custom Build
You’re building a $600K home in Alberta.
→ COC Insurance ~ $2,200 for 12 months.
Lender and Permit Requirements
- Banks, credit unions, and private lenders often require proof of COC or Builder’s Renovation insurance before releasing funds.
- Some municipalities require proof with your building permit.
- Your lender will usually be listed as a “loss payee” on the policy.
How to Save on Your Policy
- Bundle coverage with the same broker/insurer as your home policy.
- Match the term to your actual build timeline.
- Accurately value the project — don’t overinsure.
- Choose higher deductibles if you can handle more out-of-pocket cost.
Why You Should Buy Early
The safest time to secure coverage is before permits are approved or materials are delivered. Without it:
- Pre-construction damage or theft may not be covered.
- You risk gaps in coverage between project phases.
- Some insurers will not backdate policies.
The Bottom Line
- Builder’s Renovation Insurance → For occupied major renovations.
- Course of Construction Insurance → For vacant homes, new builds, or rebuilds.
Both are short-term, project-specific policies that protect you when your regular home insurance can’t.
🔨 Ready to protect your build?
Get a fast, free construction insurance quote today.
