If planning a home renovation, Canadians are reminded to tell their home insurer in order to help protect against unexpected costs.
In today’s real estate market, it’s not surprising that a number of homeowners are choosing to renovate their family homes instead of relocating. However, making the decision to stay and renovate is only the first step, it’s important to stay organized and plan carefully so the outcome comes in on budget and is as worry-free as possible.
A recent study by TD Canada Trust showed that 61 per cent of Canadians said they worry about cost overruns on their renovations.
“Many homeowners often overlook one crucial step in the planning process, which is informing their insurance companies about upcoming renovations,” says Craig Richardson, vice president at TD Insurance. “To help lower the chances of an unexpected cost overrun and resulting stress, it’s important that Canadians contact their insurer to inform them if renovations are being planned.”
Cost overruns can include unplanned repairs, unexpected delays due to an accident or injury as a result of work being completed, impulsive upgrades, or even unforeseen damage to the property, or a neighbouring property.
“What I think many homeowners may not take into account is that if an accident or property damage occurs during the renovation process, and the insurance provider wasn’t notified in advance, the insurance policy could be invalid,” says Richardson. “This makes an already stressful situation all the more so because now the homeowner is facing potentially significant and completely unplanned-for costs.”
Often, homeowners don’t inform their insurers about their renovation plans in a bid to keep their premiums from rising. According to Richardson, a home may need to be reassessed post-renovation to ensure the policy matches the upgraded property. If an insurer was unaware of renovation plans, the existing policy could be voided retroactively and the homeowner could end up paying for coverage they no longer have.
On the other hand, if a homeowner informs their insurance company about planned upgrades, the insurer can often provide advice on renovation work that a homeowner may want to consider prioritizing. For instance, if a basement is being finished, the insurance company may recommend reviewing sewer backup limits to make sure coverage is adequate. They can also identify whether certain aspects of the renovation will trigger exclusions to a policy in the event of an accident or loss, or how certain renovations such as a roof replacement can lead to a drop in premiums.
“Our goal is to ensure that homeowners have as much information as possible entering into the renovation process, so that they can enjoy a worry-free renovation which includes a properly protected home from start to finish,” says Richardson.
For more advice on home insurance, speak to your insurance provider.
Content courtesy of http://www.moneysense.ca
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