Can insurance deny claims for poor renovations?

Yes, insurance companies can and do deny claims related to poor renovations, particularly when work was done without proper permits or by unlicensed contractors. This is a serious risk that many Toronto homeowners don't fully understand until it's too late.

Permit-related denials are the most common issue. If renovations were done without required City of Toronto building permits, your insurer may refuse to cover damages resulting from that work. For example, if unpermitted electrical work causes a fire, or unpermitted plumbing leads to flooding, you could be left covering tens of thousands in damages yourself. In Ontario, electrical work must be done by ESA-licensed electricians with proper permits, and gas work requires TSSA-certified technicians.

Poor workmanship claims can also be denied if the insurance company determines that substandard work directly caused the damage. This includes issues like improper waterproofing leading to basement flooding, inadequate structural modifications causing foundation problems, or faulty HVAC installation resulting in carbon monoxide issues. Insurance adjusters will investigate the root cause, and if they find code violations or obviously poor workmanship, they may deny the entire claim.

Documentation becomes crucial in these situations. Insurance companies want to see that work was done properly - building permits, ESA certificates for electrical work, receipts from licensed contractors, and inspection records. Without this paper trail, proving that renovations met Ontario Building Code standards becomes nearly impossible.

Toronto-specific considerations include the city's strict secondary suite regulations and laneway house requirements. If you've converted a basement to a rental unit without proper permits and zoning compliance, insurance may not only deny water damage claims but could potentially void your entire policy. The same applies to unpermitted additions or structural changes common in Toronto's older neighborhoods.

The financial risk is substantial - a typical water damage claim in the GTA runs $15,000-$50,000, while fire damage can easily exceed $100,000. Beyond the immediate repair costs, you could face liability issues if poor renovations affect neighboring properties, which is particularly relevant in Toronto's dense housing areas.

Protect yourself by always pulling proper permits through toronto.ca/building, hiring licensed contractors, and keeping detailed records of all work. Yes, permits add time and cost, but they're insurance against much larger financial losses. When in doubt, consult with your insurance broker before starting major renovations - they can clarify what documentation you'll need to maintain coverage.

The bottom line: cutting corners on permits and professional work to save money upfront can cost you everything if something goes wrong.