Renovating? Don’t Let Insurance Mistakes Cost You Thousands.
A dream kitchen, a new addition, or a full home remodel can quickly turn into a financial nightmare if you don’t have the right insurance in place. Many Canadian homeowners assume their standard home policy will protect them during renovations — but that’s one of the biggest and most costly mistakes you can make.
Here are the top five renovation insurance mistakes we see most often, and how you can avoid them.
Mistake #1: Assuming Home Insurance Covers All Renovation Risks
Most home insurance policies are designed for everyday living, not active construction sites. If you start a major renovation without telling your insurer:
- Certain coverages may be suspended or excluded.
- Large-scale structural work, demolition, or replacing major systems often voids parts of the policy.
- A claim during this period could be denied entirely.
The solution: If you’re living in the home during renovations, get Builder’s Renovation Insurance. If you’re moving out or doing a major rebuild, you’ll likely need Course of Construction (COC) Insurance.
👉 Get a construction insurance quote today
Mistake #2: Not Declaring Vacancy
If you move out during renovations and fail to notify your insurer, you can lose coverage entirely under the vacancy clause.
Why this matters:
- Vacant homes are more vulnerable to fire, vandalism, and water damage.
- Most home insurance policies reduce or suspend coverage after 30–60 days of vacancy.
- Even if you still “own” the home, insurers treat an unoccupied property differently.
The solution: Tell your insurer immediately if you’ll be away for more than a few weeks. They can arrange a vacancy permit or set you up with a COC policy.
Mistake #3: Misclassifying the Project Type
Renovation or rebuild? The distinction matters.
Example:
If you’re stripping your home to the studs, replacing all wiring, plumbing, and HVAC, insurers often consider this new construction — even if the foundation remains.
Why it’s important:
If your broker sets up the wrong policy type, you may have no coverage if something goes wrong. The insurer could argue the policy didn’t match the actual risk.
The solution: Share your full scope of work with your broker, including:
- Demolition details
- Planned systems upgrades
- Occupancy status
Mistake #4: Forgetting to Insure Materials
Construction sites are a prime target for theft — and building materials are expensive.
The risks:
- Materials can be stolen before they’re installed.
- Many home policies don’t cover on-site materials during renovations.
- Weather damage to stored materials may also be excluded.
The solution: Specialized construction insurance covers materials:
- From the moment they arrive on-site
- While in storage on the property
- Until they’re permanently installed
Mistake #5: Skipping Soft Cost Coverage
Even if your “hard costs” (materials and labour) are insured, a delay can hit your budget in other ways.
Soft costs include:
- Additional loan interest
- Permit reapplication fees
- Architectural or engineering revisions
- Extended utility bills
Example:
A four-month delay after a fire could cost thousands in soft costs — none of which are covered unless you have this optional protection.
The solution: Ask your broker about adding soft cost coverage to your policy. Many policies include $5K–$10K, with higher limits available.
How to Avoid These Mistakes
- Call your broker before you start — don’t assume you’re covered.
- Be honest about occupancy — vacancy changes everything.
- Share your full project scope — let your broker decide on classification.
- Ask about materials and soft costs — don’t assume they’re included.
- Get coverage in writing — and keep copies of permits and inspections.
The Bottom Line
Renovation insurance isn’t just about ticking a box — it’s about protecting one of your biggest investments during a high-risk period.
Avoiding these common mistakes could be the difference between a smooth project and a devastating financial setback.
🔨 Renovating soon? Protect your project from day one.
Get your construction insurance quote now
