Do you need home insurance for a renovation in Canada?

With files from Tyler Wade

This article was originally published on August 13, 2021 and was updated on April 10, 2026.

Springtime marks the start of home renovation season in Canada. Once you’ve selected your contractors and shopped for materials, your renovation dreams can become a reality in a few short months. But if you haven’t contacted your insurance provider about your plans, you’ve missed a crucial step.

There are tons of things to plan and consider during your renovation, so it’s common to forget to update your home insurance coverage. In fact, just 6% of Canadian homeowners report checking their insurance policy to ensure coverage during home upgrades, and only 16% ask if coverage needs an update following a renovation.

Making changes to your home means that you’re changing what is insured on your contract, and if you don’t inform your provider, they could deny your insurance claim when you need it most. That could leave you vulnerable to out-of-pocket expenses and be a major financial setback.

Here’s everything you need to know about home insurance and home renovations.

What insurance factors should you consider during a home renovation?

The factors you should consider during a home renovation start with what you have planned. Are you making small upgrades, like installing new windows, or are you planning a major renovation, like adding an extension to the house? The answer will influence how your home insurance is impacted.

To ensure you have proper protection throughout the reno, it’s essential to contact your insurance company or broker before you start any work. They will help you understand how your premium may change and will advise you on any additional protection you might need while the work is getting done. 

In general, here are a few factors to keep in mind:

1. Vacant home insurance 

If you’re not going to live in your home during the renovation, you’ll need to ask your insurer about vacant home insurance. In some cases, you may need to get a vacancy permit if you’ll be away for 30 days or more, which could cost you an extra $30-$50 per month. 

If something were to happen without a vacancy permit, you’d be in breach of your contract since most insurers don’t cover long-term vacancies. Not all companies offer vacant home insurance, so if it’s something you’ll need, consider shopping for new home insurance quotes from providers who will grant you coverage. 

2. Builder’s risk insurance

Depending on the type of renovation you’re doing, you may need builder’s risk insurance. This is a type of home insurance that protects properties under construction. It’s designed for major renovations and will protect you from potential losses while your home is being worked on. 

For example, if your house is damaged by lightning, fire or wind, builder’s risk insurance will cover you. Alternatively, if materials are stolen from your home or are damaged, this insurance policy will pay for the cost of repairs. 

3. Third-party liability coverage

Home renovations mean people are in and out of your home. Contractors, painters and designers are just some of the people who will be coming and going, and you want to ensure they stay safe while on your property. If someone were to get injured, you could be responsible. Without coverage, you’d be on the hook for legal fees or settlement costs.

Liability coverage is included in standard home insurance policies, but there is no requirement for the amount you need to carry. When you’re renovating, having sufficient coverage is more important than ever. Make sure to ask your insurer how much coverage you have and whether you should add more. You may also have the option to add third-party liability coverage to your builder’s risk insurance if you take out a policy.

4. Contents insurance

While a home is being renovated, you are at greater risk for theft and vandalism. While contents insurance is part of a comprehensive home insurance policy, coverage could be limited. You may want to consider buying additional coverage to protect your valuable items.

5. Contractor insurance

You should check with your contractor on what their insurance covers. If one of their workers is injured on the job site, they need provincial workers’ compensation coverage to protect them. They should also have private insurance protecting their craftsmanship, their tools, and their liability to their crew over and above the workers’ compensation. If not, the responsibility could fall on you. Be sure to speak with your contractor – you don’t want them to need your protection.

6. Standard home insurance coverage

Your standard coverage may exclude renovations if you don’t disclose them to your provider. It’s important to read the fine print of your home insurance policy, says Romana King writing for MoneySense Magazine, “there’s a clause in the vast majority of home insurance policies that eliminates your coverage protection should you undertake a home renovation. So, if a pipe bursts during that bathroom remodel and ultimately destroys the floors on your second floor, you could find out that your claim is denied.”

Reviewing your existing coverage and connecting with your insurance company before starting your renovation will help you avoid a financial disaster. 

What steps should you take after the renovations are complete?

Once the renovation is complete, contact your home insurance company to let them know what’s been done, as your policy will need to reflect the updates. 

Upgrades typically increase the home's value, so you may need to purchase more coverage on your policy. On the other hand, improving your home's safety through a renovation, such as by installing a backup pump, could reduce your insurance premiums. 

Let’s say your renovation was adding a basement apartment. Here are three ways this modification to your home could change your policy:

1. Your home value will increase. The value of a home with a basement apartment goes up, meaning you’ll want to take out more insurance on the house. Confirm the replacement value of your home now that you’ve completed the renovation, as home insurance providers often determine value based on purchase price. Still, in hot markets, that price may be woefully outdated. You need to make sure that, in case of a catastrophe, your home can be rebuilt to your standards.

2. You may need additional coverage. If you plan to Airbnb your new basement apartment, you’ll likely need short-term rental insurance. Only a few select insurers provide this type of coverage. Without it, your claim could be denied if your insurer is unaware that your home is being used as a short-term rental.

3. Your home occupancy could change. If you’re renting out your basement, your occupancy status will change. In this case, your new tenant should get a tenant’s insurance policy because the contents of their apartment aren’t covered under your policy. 

Also read: How tenant insurance helps landlords and tenants lower their risk

The exact changes to your home insurance will depend on the type of renovation you did to your home. Contact your insurance company both before and after any planned renovations to learn how your policy will be affected.

The bottom line

In closing, before you get your drawings, have a conversation with your insurance company or broker about your intentions. If they’re not happy, or if it raises your premiums too much, you may need to shop for new home insurance quotes before you start shopping for your quartz countertop. Considering the impact on your premiums before starting work on your home can help you avoid potential complications. 

Also read:

• How much home insurance do I need?
• 10 home upgrades that reduce your home insurance costs
• How home renovations affect your insurance 
• How installing a pool affects your home insurance