Home Renovation: Why Not Telling Your Insurer Could Cost You Big
Imagine you’ve just finished that dream basement—home theatre, wet bar, the works—when a burst pipe floods the space. You file a claim… and learn your insurer didn’t know the basement was finished. That’s a problem. In a July 2025 survey of Ontario homeowners, only 47% said they told their insurer after completing a major upgrade; 26% admitted they didn’t tell them at all, and 27% were unaware or chose not to answer. That’s more than half of homeowners potentially leaving themselves exposed.
Why this matters in Ontario: “Material change in risk”
Home policies are priced on what your home is and how it’s used. Big upgrades change both. Ontario’s Statutory Conditions require you to promptly notify your insurer in writing of any material change in risk (the kinds of changes that would make an insurer charge more or decline the risk). Failing to do so can affect claims, or even your policy status
What can go wrong if you don’t report major reno’s
Coverage gaps / underinsurance. If your insurer never updated your home’s rebuild value, you might not have enough coverage to replace the new finishes or added space. (The survey’s guidance notes the same risk.)
Claim disputes or denial. If a loss stems from changes your insurer wasn’t told about (e.g., new electrical), nondisclosure of a material change can be grounds to deny coverage under the Statutory Conditions—fact-specific, but a real risk.
Cancellation or non-renewal. Discovering undisclosed major changes can lead an insurer to adjust terms, surcharge, or stop insuring you going forward. (The survey article warns of this outcome, too.)
You could lose “guaranteed replacement cost.” Some policies offer a guarantee to rebuild even if costs exceed your limit—but certain insurers warn you can lose that perk if you don’t report larger renos.
What you do (and don’t) need to report
You don’t need to call about purely cosmetic touch-ups (painting, swapping light fixtures, basic tile). Major work and anything that needs a permit generally does need a heads-up:
Finishing a basement or attic (adding finished living area)
Adding rooms or a second storey
Full kitchen/bath gut and re-builds
Rewiring, re-plumbing, or new HVAC systems
Roof replacements and larger structural work
Building decks, garages, sheds, or installing a pool
Large projects change the home’s replacement cost and risk profile. Insurers and brokers—including consumer guidance from Desjardins and the LowestRates survey—advise notifying for these. Bonus: some upgrades (new wiring, plumbing, monitored alarms, and roof) can earn discounts.
Renovation in progress? Cover the build phase too
Renovations create temporary risks: exposed walls, disconnected alarms, materials on site, more foot traffic. Two things to nail down before work starts:
Are you still covered during construction?
Big projects can change how your policy responds mid-reno—especially if you’ll be out of the home. In Canada, a home left vacant for ~30 days can void standard coverage unless you arrange a vacancy permit or other endorsement. Ask before you move out or if work will make the home unlivable.Do you need builder’s risk insurance?
For major renos, your broker may switch you to “building under construction” or recommend builder’s risk(“course of construction”) coverage. This short-term policy typically covers the structure while it’s being worked on and the materials on-site/off-site/in transit from perils like theft, vandalism, fire, and certain weather events; liability is usually separate.
Hiring contractors? Check two protections
Commercial general liability (CGL). Ask for a certificate of insurance (common limits: $2M). If their work causes damage, their policy should respond first. (The survey article and legal guidance echo this best practice.)
WSIB (Ontario) status, where applicable. In construction, there are clearance rules—some home reno scenarios are exempt from the legal requirement for a WSIB clearance certificate when a homeowner hires a contractor for exempt home renovation work. That said, many homeowners still ask for proof the contractor is covered, because if workers aren’t covered, you could face liability if someone is injured on your property. Check WSIB guidance and consider asking for proof of coverage.
DIY note: Electrical, gas, and structural work must be to code and typically require licensed pros. Poor or unpermitted work can create safety hazards and claim issues. (Even the LowestRates survey warns to leave higher-risk tasks to licensed trades.)
After the dust settles: update your policy (and ask for discounts)
Once the reno is complete:
Increase your Coverage A (dwelling) limit to reflect the added value (e.g., that $50,000 basement).
Preserve guaranteed/extended replacement features by documenting the update with your insurer. Some providers make continued eligibility conditional on reporting larger renos.
Review liability if you added a rental suite, pool, trampoline, or a home business—you may need higher limits or an umbrella.
Ask for credits for risk-reducing upgrades (new roof, electrical/plumbing, monitored alarm). Consumer guidance notes these can lower premiums.
Pro tip: Tell your broker before you swing the hammer; many recommend giving a heads-up up to 12 months in advance for bigger projects. The July 2025 survey repeats this advice.
Quick Checklist: Before Your Next Reno
Call your broker first about scope, permits, and whether you need a builder’s risk policy or vacancy/unoccupancy endorsement while work is underway.
Verify your contractor’s insurance (CGL certificate) and WSIB status where applicable; keep copies on file.
Don’t DIY beyond your licence/skill. Leave electrical, plumbing, gas, and structural changes to qualified pros.
Document everything. Keep permits, contracts, receipts, and photos to help set the right coverage and support any future claim.
When it’s done, update Coverage A (and any endorsements) so the new value is protected—and ask about discountsyour upgrades may unlock.
Final words…
Upgrades should increase comfort—not your risk. A 10-minute conversation with your broker can save months of headaches at claim time. If you’re planning a renovation anywhere in Ontario, we’ll help you set up the right coverage during construction and make sure your policy reflects the finished result—so you get the protection (and discounts) you’ve earned.