Most homeowners assume their house is fully covered the moment a renovation starts. It often isn’t. A major renovation can change how your home insurance works — and in some cases, leave a gap right when you have the most on the line.
Before the first wall comes down, it’s worth knowing when you need builder’s insurance, what your own policy may not cover, and what a licensed contractor actually brings to the table.
What “Builder’s Insurance” Actually Means
“Builder’s insurance” is a general term. Most of the time, people are talking about builder’s risk insurance — also called course of construction insurance. It covers the building and the materials while the work is being done: fire, theft, vandalism, water damage, or a storm taking out your half-finished addition. It protects the project itself, not just the finished home.
That’s different from the insurance your contractor carries, and different from your everyday home insurance. Each one covers a different risk. The trouble starts when a homeowner assumes one of them covers everything. It usually doesn’t.
Your Home Insurance May Not Cover a Renovation
Here’s the part that surprises people. A standard home insurance policy is written for a home that is lived in and not under construction. Once you start a major renovation, two things can happen:
- Your insurer expects to be told. Most policies require you to notify them about major work. Skip that step, and a claim during the reno can be reduced or denied.
- A vacancy clause can kick in. Many policies limit or suspend coverage once a home sits unoccupied for a set period. If your renovation means living elsewhere for a few months, your coverage can quietly lapse right when the house is most exposed.
None of this means your policy is bad. It means a renovation is a change your insurer needs to know about. One phone call usually sorts it out.
When Do You Actually Need Builder’s Risk Insurance?
Not every project needs a separate policy. A simple rule of thumb:
- Small, cosmetic work while you stay in the home — paint, flooring, a bathroom refresh — is often fine under your existing policy, as long as you tell your insurer.
- Major renovations, structural work, additions, or any project where you move out usually call for builder’s risk or course of construction coverage. The bigger the project and the longer the home is exposed, the more it matters.
When in doubt, treat it as needed and ask. The cost of the coverage is small next to the cost of rebuilding work that wasn’t insured.
What Your Contractor’s Insurance Covers — and What It Doesn’t
A licensed contractor should carry two things, and you should ask to see proof of both:
- Commercial general liability (CGL). This covers damage or injury the contractor causes — for example, if their work damages a neighbour’s property, or someone is hurt on site.
- WSIB coverage. This protects you if a worker is injured on your job, so that liability doesn’t land on you.
Here’s the key point: your contractor’s liability insurance protects against their mistakes. It does not insure your building against a fire or a storm during construction. That’s what builder’s risk is for. A good contractor carries their coverage and still tells you to confirm yours. The two work together.
The 15-Minute Call That Protects Your Home
Before any major renovation, call your insurance broker. Tell them exactly what’s happening — the scope, how long it will take, and whether you’ll be living in the home. Ask three questions:
- Does my current policy still cover the home during this renovation?
- Do I need a builder’s risk or course of construction policy?
- Will a vacancy clause affect me if I move out during the work?
It’s a short call. It can save you from a six-figure problem if something goes wrong mid-project.
How Cornerstone Protects You
Cornerstone Construction is a fully licensed and insured Ontario company, and we carry both general liability and WSIB coverage. We’re happy to provide certificates before we start — you should expect that from any contractor you hire.
We’ll also do something a lot of contractors skip: we tell you to call your broker first. We’re a general contractor, not an insurance broker, so we won’t pretend to give you coverage advice. What we will do is make sure you walk into your renovation knowing your biggest asset is protected from every angle — the work, the workers, and the building itself. And if your project is the result of damage you’re already claiming, our insurance restoration work is built for exactly that.
That’s part of how we protect homeowners on every job. One contract. One team. No surprises.
This article is general information for Durham Region homeowners and is not insurance advice. Always confirm your specific coverage with a licensed insurance broker.
Want to see everything our price protects you from — the coverage, the site protection, the work behind the walls? Read Why We Aren’t the Cheapest.
