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Home Insurance for a New Build in Ontario: Course-of-Construction Cover, the Exclusions That Bite, and What ICF Changes
Costs and financing Insurance From a builder
Home Insurance for a New Build in Ontario: Course-of-Construction Cover, the Exclusions That Bite, and What ICF Changes
Insurance is the part of a build nobody wants to talk about until a backhoe hits the neighbour’s fence or a pipe freezes in a house that is 90 percent done. I am a builder, not a broker, so this is the view from the site: what has to be in place at each stage, and the clauses that have surprised my clients.
Short version: Between the first shovel and the occupancy permit the house is insured under a builder’s risk (course-of-construction) policy, carried by the builder on a contract build or by you on an owner-build, covering the structure and materials against fire, theft, wind and vandalism, with liability for the site. At occupancy it switches to a regular homeowner policy, and the gap between the two is where claims get denied. On the homeowner side, read the exclusions: sewer backup and overland water are add-ons, a house left empty in winter for more than a few days without someone checking the heat may not be covered for frozen pipes, maintenance failures are not insured, and a custom house needs a replacement-cost number based on what it would cost to rebuild, not what it sold for. Concrete and ICF construction, a monitored alarm, a sump with battery backup and a leak shut-off valve all earn discounts.
During construction
Builder’s risk (course of construction). Covers the building as it goes up, the materials on site and in transit, and usually the temporary works, against fire, theft, vandalism, wind and collapse. On a contract build the builder carries it and names you and the lender; ask to see the certificate before the footings go in, and confirm it runs until the occupancy permit, not until the contract’s original completion date. On an owner-build you buy it yourself through a broker who does construction, and your lender will insist. A material package (a kit home) usually includes it on the materials only.
Liability. The builder’s commercial general liability covers injury and damage caused by the work; the subs carry their own; WSIB covers the workers. Verifying a contractor lists the certificates to ask for. If you are the general contractor, you are the one who needs the liability policy, and a plain homeowner policy on the lot will not do it.
The land. If you bought the lot before building, insure it; a vacant lot carries liability (the neighbour’s kid on the dirt pile) and some insurers want a separate policy. Construction mortgages covers what the bank will want to see at each draw.
The switch at occupancy
Builder’s risk ends when the house is complete and occupied; the homeowner policy has to start the same day. Tell the broker the occupancy date two weeks ahead, give them the final specification (the square footage, the construction type, the heating system, the roof, the sump and alarm), and get the policy bound before you sleep there. The two mistakes: moving furniture in before the homeowner policy starts (contents are not under builder’s risk), and leaving the finished house empty for a month while you sell the old one, which the vacancy clause below makes expensive. The final walkthrough checklist has the paperwork to collect for the broker.
The exclusions that bite
| Clause | What it means | What to do |
|---|---|---|
| Sewer backup | Water coming up a drain is not covered unless you add the endorsement | Add it; add a backwater valve and a sump alarm, which lowers the premium |
| Overland water | Water coming in from outside (flood, snowmelt, a creek) is a separate add-on, offered by most insurers now but not all and not everywhere | Ask; on a low lot or near water, buy it or accept the risk knowingly |
| Unoccupied in winter | Away more than a few days (often four) in heating season with no one checking the heat: frozen-pipe damage denied | Have a neighbour check daily or install a connected thermostat and leak sensors; tell the insurer |
| Vacancy | Nobody living there and no intent to return (a house for sale, an estate, a build finished early): most coverage stops after 30 days | Get a vacancy permit before day 30; costs more, covers less, better than nothing |
| Maintenance | Rot, a 30-year-old roof, a foundation crack you ignored, raccoons in the attic | Not insurable; this is what first-year maintenance is for |
| Earthquake | Excluded unless added | Rarely bought in Ontario; your call |
| Jewellery, collections, home office | Sub-limits of a few thousand dollars | Schedule the items; add a home business rider if you work from the house |
| Renovations and upgrades | A house that is bigger or better than the policy says can be a change in risk | Tell the broker when you spend over about $10,000 on it |
Replacement cost on a custom house
The insurer needs the cost to rebuild the house, not the market value and not the land. For a custom ICF house with radiant floors and triple-pane windows, the number is higher than the brokers’ software guesses for a “two-storey, 2,400 square feet”, and if the policy limit is under the real cost, a total loss leaves you short. Give the broker the actual contract price plus the site work, and review it every few years; cost to build a house in Ontario is the sanity check. Guaranteed replacement cost endorsements exist and are worth asking about on a house that would be expensive to replace.
What concrete construction changes
Insurers rate by construction type, and a house with reinforced concrete walls, a non-combustible core and no wood in the exterior walls is a better fire and wind risk than a frame house. Many insurers give a discount for masonry or concrete construction; some do not have a box for ICF and need the broker to explain it, so bring the specification. A monitored alarm, a battery-backed sump, a water leak shut-off valve, a steel roof and a wood stove with a WETT certificate all move the premium too. ICF pros and cons covers the rest of what the wall does.
A short checklist
- Builder’s risk certificate, with you and the lender named, running to occupancy.
- Builder’s liability and WSIB clearance; your own liability if you are the GC.
- Homeowner policy bound for the occupancy date with the real rebuild cost.
- Sewer backup and overland water endorsements decided on purpose.
- Winter-away plan and the vacancy rule understood before you travel.
- Scheduled valuables, home office rider if needed.
- The specification on file with the broker: construction type, heating, roof, sump, alarm, shut-off valve.
Related guides on this site
Sources and further reading
Questions people ask
What insurance do I need while building a house in Ontario?
A builder's risk (course-of-construction) policy on the structure and materials, carried by the builder on a contract build or by you on an owner-build, plus liability coverage for the site. It runs from the start of work to the occupancy permit, when a regular homeowner policy takes over.
Does home insurance cover flooding in Ontario?
Sewer backup and overland water are both add-ons, not standard. Most Canadian insurers now offer overland flood coverage in most areas; it is priced by the lot's risk and may not be offered on the highest-risk properties.
Will my insurance pay if pipes freeze while I am away?
Often not if you were away in the heating season for more than a few days (commonly four) without someone checking the heat daily or an arrangement the insurer accepts. Check the clause and arrange a check or a connected thermostat with leak sensors.
Is an ICF house cheaper to insure?
Usually somewhat: concrete construction is a better fire and wind risk and many insurers discount it, though some need the broker to explain what ICF is. A monitored alarm, a battery sump and a leak shut-off valve lower it further.
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Reviewed and updated October 2026. Costs are Ontario ranges, not quotes; code references are to the Ontario Building Code in force at that date.
