Are you planning your next big home renovation this spring? If so, you may want to take the time to call up your broker before embarking on your latest project to inform them of the updates you’re looking to make. This is an integral part of being a homeowner and a policyholder because it ensures that your coverage will always accurately reflect the overall value of your home.
Moreover, it’s important to note that – even if you haven’t renovated recently or aren’t planning on one for the next few years – you may need to review your insurance policy regularly anyway, as reconstruction costs will fluctuate regardless of any changes you make. Older houses’ material costs may rise with time as they’re considered uncommon. Building codes can change. Inflation may impact both labour and materials – and that’s just the tip of the iceberg. Let’s dig in.
Reconstruction Costs and Your Insurance
Unfortunately, the cost to replace your home entirely as it stands may have changed, and your homeowner’s insurance rates have likely risen due to several factors. Among those factors is the higher price for building materials, supply-chain disruptions, and the higher frequency of natural weather calamities. Even if you are not planning on a renovation, your rates may still have changed. You may wish to do an annual review of your insurance coverage with your broker to ensure that your current coverage still accurately reflects the overall cost it would take to replace your home as it stands today, provided current market trends and the cost of building materials.
As for renovations, while you’re likely to be paying more for your insurance because the overall value of your home has gone up, rest assured this isn’t a bad thing! The new reconstruction costs should be reflected in your insurance coverage because it means you’ll have coverage if anything happens.
Informing Your Broker
First thing’s first: if you’re planning on a renovation, call your broker and advise them on the changes you plan on making. Not every renovation will impact the overall replacement value of your home but it’s better to be safe than sorry and you’ll always want to be sure that the latest kitchen renovation you completed – and all that time and money you have sunk into it – is protected in the event of a natural disaster or unexpected damage. Provide your broker with as much details as possible about the recent renovation, the square footage, the materials used, the changes made, etc.
Some renovations may even qualify you for a home insurance discount, depending on the nature of the renovation and the insurance provider you are with. Examples of renovations that may lower your insurance premiums include:
- Replacing an old roof with a brand new one
- Updating any integral home systems, like plumbing, electrical, HVAC
- Installing a fire or burglary alarm system
- Installing a sewer backup valve or sump pump
- Deadbolting locks
- Adding a fence around your pool
As you can see, the renovations you may make to lower your insurance premiums are largely functional or security based and not cosmetic. Still, it’s important to inform your broker of any changes you make – no matter their nature.
Insurance During Renovation Period
If your construction project is planned to last several weeks or even months, you may want to update your existing policy during this time to ensure you have the protection you need. You’ll need to change your policy to reflect the new rebuild value of your home, but you may also want to increase your liability limits during the renovation period in case part of your unfinished structure hurts a third-party.
If you’re planning a large-scale renovation, you’ll want to consider something known as “Dwelling Under Renovation” coverage or “Builder’s Risk.” This protects your dwelling that is being constructed or renovated.
There’s no way to beat around the bush. Home renovations can be costly, and they’re certainly not a small task to take on. They can take between a few weeks to several months to complete, and you can expect that the larger scale your renovation is projected to be, the more it will cost and the more time it will take. Renovations that include the addition or modification of major home systems, like plumbing, electrical wiring, and ventilation are bound to add on a pretty penny.
Overall, there’s no average cost for a home renovation in Quebec, as every renovation will look different, include different materials, and so on. For specific renovation examples, see the average figures below:
- In Montreal, the average price of a kitchen remodel in 2020 was between $75 and $250 per square foot. More complex projects will range on the higher end of costs. As a result, the average overall cost of a kitchen remodel may range between $18,000 and $35,000.
- Large bathroom remodels can range up into the $15-17,000s, whereas updating small essentials in half bathrooms or bathrooms without showers/bathtubs can cost as low as $4500.
- A basement finishing job may put you out quite a bit, depending on the square footage of your overall basement. Ceiling may cost you between $3 and $5/square foot, flooring can put you out up to $11 per square foot, and the addition of a bathroom may cost you up to $20,000.
Suffice to say, a home renovation isn’t cheap. But, if you’ve planned on this renovation for a while and you’re looking forward to your home makeover, that’s great! Just make sure that you give your LMBF insurance broker a call before you begin so that we can review your existing coverage and make sure you have the coverage you need.
