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How do bylaw changes affect my home insurance?

When Joyce and Dan Bonner came home to their original 1940s cottage-style home in Chestermere, they were shocked to find a tractor-trailer sitting in their front yard. They were even more shocked when they realized that the truck had veered off the TransCanada highway, ploughed through their backyard, entered their living room, and went through their bay window before coming to a stop in their front yard.

Thankfully, the Bonners had home insurance. They never thought they’d need to use it in such a scenario, though!

After the adjuster came and the claim was settled, the Bonners were a little surprised to learn that their insurance provider would pay for everything—clean up tear down and rebuild of their home—except the cost to comply with their town’s updated bylaws. Turns out a lot had changed in the more than 50 years since their home had been built. It would take at least $10,000 for the home to be rebuilt to comply with the new bylaws and building codes.

As a homeowner, we don’t often think about bylaws and building codes – unless we’re planning a renovation or addition. If your home is newer, you won’t have much to worry about for now. But if your home is older or you’re planning to stay in your home for a while, you may want to get bylaw coverage for your home insurance.

How do bylaws affect rebuilding or repairing my home?

When you build or undertake a construction project, you have to follow the rules. These bylaws or building codes are implemented to improve safety, longevity and the environmental impact of buildings.

What is bylaw coverage?

Bylaw coverage helps cover the additional costs to bring your home up to code or to meet current bylaws if you have a covered claim. You may need to upgrade materials or change the design. This can be expensive and won’t be accounted for in the replacement cost of your home. Without bylaw coverage, you’ll need to cover the difference.

How do I get bylaw coverage?

Most home insurers now offer bylaw coverage. Some of them even include it as part of their standard home insurance. If you’re not sure if you have this coverage, you should check your policy documents and speak to your broker.

If you don’t have bylaw coverage, your broker can add it to your policy if it’s offered by your insurance company. It may come at a small additional cost. If your insurer doesn’t offer this coverage, you may want to look at a different home insurance provider.