Buying property insurance is not a one-time transaction that can be forgotten until a claim occurs.

Your insurance policy is based on the information provided about the property when the coverage was arranged. If the occupancy, use, heating, construction or overall risk changes, the insurer may need to review the policy.

One of the most important questions property owners should ask is:

“Has anything changed that my insurance broker needs to know about?”

Failing to report an important change could restrict coverage, change how a claim is settled or cause coverage for the affected portion of the risk to become void.

What Is a Material Change in Risk?

A material change in risk is generally a change that would influence an insurer’s decision to:

• Continue insuring the property
• Change the premium
• Add conditions or exclusions
• Require an inspection
• Change the deductible
• Reduce or restrict coverage
• Cancel or decline the risk

Saskatchewan’s statutory conditions require an insured to promptly notify the insurer or its agent in writing of a change that is material to the risk and within the insured’s control and knowledge. If the insurer is not promptly notified, the contract may be void as to the portion affected by the change. every small change is material. However, property owners should not be expected to determine materiality on their own.

When in doubt, contact your broker.

A Change in Occupancy

How a property is occupied is one of the most important parts of an insurance application.

Different policies and underwriting rules apply to properties that are:

• Owner-occupied
• Tenant-occupied
• Seasonally occupied
• Used as a secondary residence
• Used for short-term rentals
• Unoccupied
• Vacant
• Under renovation or construction

Homeowners, landlords, tenants and seasonal-property owners require different forms of coverage. IBC identifies separate insurance arrangements for owner-occupied homes, rented dwellings, seasonal residences and other occupancy types. Renting Out Your Home

A homeowner policy may not be appropriate once the owner moves out and tenants move in.

The insurer may need to change the policy to a rented-dwelling or landlord form. Coverage for the building, contents, rental income, vandalism, water damage and liability may differ.

You should report:

• Renting the entire home
• Renting a basement suite
• Adding a secondary suite
• Taking in boarders
• Renting rooms
• Beginning short-term or vacation rentals

Do not assume an online rental platform’s protection replaces a proper property insurance policy. Specialized home-sharing coverage may be required. Vacancy and Unoccupancy

A vacant property and an unoccupied property are not always treated the same way.

A home may be temporarily unoccupied while the owner is travelling but still contain furniture and show evidence that the owner intends to return.

A vacant home may have no occupants, little or no furniture and no immediate intention of being used as a residence.

Vacancy can significantly change the risk of:

• Undetected water damage
• Theft
• Vandalism
• Fire
• Unauthorized entry
• Delayed discovery of damage

Policies may restrict or exclude certain losses after a property becomes vacant. The applicable period and requirements vary by insurer and policy, so vacancy should be reported immediately rather than waiting for a specific number of days.

Changes to Heating

Heating systems are an important underwriting consideration.

Contact your broker before:

• Installing a wood stove
• Adding a wood-burning fireplace
• Using wood heat as a primary or auxiliary heat source
• Installing an outdoor wood boiler
• Converting to oil heat
• Installing or replacing an oil tank
• Changing from one primary heating system to another
• Discontinuing regular heat to part of the building

The insurer may require:

• Professional installation
• Permits
• Inspections
• Photographs
• Installation certificates
• Information about clearances and protective materials
• Details about the age, type and location of an oil tank
• Confirmation that the system complies with applicable standards

Do not wait until a claim to mention a wood stove or oil tank that was not disclosed on the application.

Renovations, Additions and Construction

Major renovations can change both the risk and the rebuilding cost.

Report projects such as:

• Building an addition
• Finishing a basement
• Adding a bathroom or kitchen
• Removing structural walls
• Replacing electrical or plumbing systems
• Adding a swimming pool
• Building a garage or shop
• Adding a rental suite
• Completing major exterior renovations
• Leaving the home partially exposed during construction

A standard homeowner policy may not provide appropriate coverage during a major renovation or construction project. A course-of-construction or builder’s risk policy may be required. IBC recommends arranging the proper coverage before construction or significant renovation work begins. ovations can also increase the amount required to rebuild the home. An updated kitchen, finished basement, addition or upgraded interior should be included in the replacement-cost valuation.

Changes in How the Property Is Used

Tell your broker when the activities taking place at the property change.

Examples include:

• Starting a home-based business
• Storing business inventory
• Having customers regularly attend the property
• Operating a daycare
• Adding farming or agricultural activity
• Boarding animals
• Operating a workshop
• Renting storage space
• Using an outbuilding commercially
• Increasing the number of families or unrelated occupants

A homeowner policy may provide little or no coverage for business property or business-related liability. The Government of Canada warns that standard home insurance generally does not cover home-based business claims and may provide only limited coverage for business equipment. Changes to Protective Systems

Changes to protective devices should also be reported, particularly when a discount or policy condition depends on them.

Examples include:

• Disconnecting a monitored alarm
• Removing a sump pump or backup system
• Disconnecting a water-leak detection system
• Changing the electrical service
• Removing a backwater valve
• Disconnecting sprinklers
• Allowing a heating-monitoring system to lapse

A discount based on a protective system assumes that the system remains installed and operational.

Updating the Home Without Updating Its Valuation

A material change is not limited to something that makes the property more hazardous.

Improvements can also create underinsurance.

A home insured using information from ten years ago may no longer reflect:

• A new addition
• A finished basement
• A renovated kitchen
• Additional bathrooms
• Upgraded flooring
• Custom cabinetry
• High-end finishes
• New detached structures
• Increased square footage

Replacement cost is the estimated amount required to rebuild the home—not its market value or tax assessment. Wawanesa notes that replacement cost is distinct from market and tax-assessment values and should be reviewed with the broker. ling to update the valuation could affect policy limits, eligibility for Guaranteed Replacement Cost or the application of a co-insurance clause.

Maintenance Is Different From a Material Change

Wear and tear is not always a “material change” in the statutory sense.

However, the deteriorating condition of a property can still affect:

• Whether damage is covered
• Whether depreciation is applied
• Whether the insurer will renew the policy
• Whether repairs are required
• Whether certain components remain eligible for Replacement Cost

Insurance is intended primarily for unexpected or accidental losses. It is not a maintenance contract or home warranty. The Government of Canada explains that home insurance generally does not cover predictable events related to home maintenance. Wear, Tear and Gradual Deterioration

Property owners are responsible for maintaining their buildings and systems.

Common maintenance-related issues include:

• Worn-out shingles
• Deteriorated siding
• Failed exterior caulking
• Rot
• Rust
• Corrosion
• Gradual cracking
• Repeated seepage
• Deteriorated plumbing
• Aging seals and gaskets
• Failed grout
• Long-term moisture problems
• Mold resulting from unresolved moisture
• Mechanical breakdown from age or lack of servicing

The presence of deterioration does not necessarily mean every claim will be denied. A separate sudden event may still be covered.

However, the insurer may distinguish between sudden insured damage and the condition that existed before the loss.

Resulting Damage Versus the Worn-Out Component

Sometimes insurance may cover resulting damage but not the component that failed.

For example, a sudden plumbing failure may cause water damage to flooring and drywall. Depending on the policy, the resulting water damage may be covered while the cost of replacing the worn-out pipe or failed component is not.

Similarly, IBC explains that interior water damage resulting from a roof leak may be covered in some circumstances while the deteriorated roof itself may not be covered when its condition is due to wear and tear or poor maintenance. distinction depends on the cause of loss and the policy wording.

Depreciated Materials May Affect the Settlement

Older building materials may be insured differently from newer materials.

An insurer may:

• Apply depreciation
• Settle certain items on an Actual Cash Value basis
• Apply a roof or exterior-surface settlement schedule
• Restrict Replacement Cost
• Require replacement before renewal
• Exclude a deteriorated component
• Increase the deductible

Common examples include older:

• Roofing
• Plumbing
• Electrical systems
• Heating equipment
• Oil tanks
• Water heaters
• Exterior siding

Maintaining insurance does not guarantee that every aging component will be replaced with a brand-new one after a claim.

Review Your Property Regularly

Property owners should periodically inspect:

• Roofing and flashing
• Eavestroughs and downspouts
• Windows and doors
• Exterior caulking
• Siding and stucco
• Plumbing connections
• Water heaters
• Oil tanks
• Heating systems
• Foundations
• Sump pumps and backwater valves
• Decks, balconies and attached structures

Document significant upgrades with:

• Photographs
• Receipts
• Permits
• Inspection reports
• Contractor invoices
• Warranty documents

These records can help establish when work was completed and the condition of the property before a loss.

Changes You Should Report

Contact your broker when:

• You move out
• A tenant moves in
• The home becomes vacant
• You begin short-term rentals
• You add a suite
• You install wood heat
• You install or replace an oil tank
• You begin a major renovation
• You add a garage, shop or addition
• You start operating a business
• The use of an outbuilding changes
• You disconnect an insured protective device
• You make significant improvements
• You are unsure whether something affects the policy

Reporting a change does not automatically mean coverage will be cancelled. It gives the broker and insurer an opportunity to review the change and arrange suitable coverage before a claim occurs.

Every insurance policy is different. The declarations, policy wording, endorsements and applicable legislation determine how a change affects coverage.