Are you building or renovating? Get your insurer in the game.
What do you do when you can't travel, go to the movies, or entertain friends at home? Renovation, it seems, if one relies on the many Canadians who embarked on construction or renovation work during the pandemic. If you are one of them, Desjardins Insurance reminds you that it is in your best interest to inform your insurer of your plan as soon as possible. here's why
The key word: cost of reconstruction
When you purchase home insurance that includes replacement cost protection, the amount for which your insurer agrees to compensate you in the event of total loss in a loss is based on the cost of rebuilding your home.
In other words, how much would it cost to rebuild your house the same way it was if it were completely destroyed in a fire, for example.
How is the cost of reconstruction determined?
The municipal assessment or the market value of your home or the land have no impact in this calculation. To establish the cost of reconstruction, insurers rely instead on a set of criteria:
some are fixed, such as the year of construction and the dimensions of the building;
others vary, such as the cost of materials and labor.
When the pandemic drives up prices
However, reconstruction costs have increased dramatically in recent years due to rising prices for labor and materials. This increase has been even more marked since the start of the pandemic. For example, the price of lumber and some materials has doubled or nearly tripled in recent months.
Hence the importance of establishing a fair cost of new reconstruction that takes into account today's realities. Otherwise, you could suffer a significant financial loss if you lose your property altogether.
Impact on your premium and coverage
In addition to having an impact on the cost of rebuilding your home, the work can influence your premium and your coverage. It is wrong to believe that any renovation will automatically increase your premium. For example, if you replace a roof, an oil tank or an electrical installation that posed a risk of water infiltration, leakage or fire, your premium could be reduced.
On the other hand, your work may require adding certain protections or changing the protection limit, if you already have it. For example, if you finish your basement in a home theater, your losses will be more important in the event of water infiltration of the ground and the sewers. It is therefore in your interest to have sufficient protection to cover the damage should this happen to you. Or, a new roof may re-qualify you for rain, snow or ice infiltration protection if it had been removed due to the age of your roof.
Call in the experts
Finally, let us remember the importance of calling on qualified people to carry out the work, that is to say experts holding valid and adequate liability insurance, as well as a contractor's license or a certificate of body competence. of recognized trade in your province. Otherwise, you could compromise the safety of your family and suffer significant financial loss in the event of injury or poor workmanship.
Recommendation
Desjardins Insurance recommends that you inform your insurance company in order to update your home insurance when you make changes to your property, such as adding a floor or an extension, fitting out the basement, building a solarium, etc.
If your work changes the cost of rebuilding your property and you are in doubt as to the value being offered, you can always hire a specialized appraiser for insurance purposes. This specialist will visit the site to carry out the assessment, taking into account both the specific characteristics of your building and the many factors that can influence the possible cost of a new reconstruction.
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