Your Home Is Insured for What You Paid. That's the Problem.

A client asked me why his home was insured for less than he paid for it.

Then a neighbour asked why hers was insured for more.

Both were correct, and neither number had anything to do with the purchase price.

Not the market. The rebuild.

Materials, labour, demolition, permits, and putting the same home back on the same lot.

Your purchase price includes the land, the neighbourhood, and what a buyer felt like paying that month.

None of that burns down.

Why this has changed recently

Construction costs and labour rates have moved a lot in Ontario over the past few years.

A rebuild figure set five years ago may no longer reflect what the work costs today.

That gap only becomes visible at the worst possible moment.

Ask these at renewal

✅ What rebuilding cost is my home insured for, and when was it last calculated?
✅ Do I have guaranteed or extended replacement cost?
✅ Does my coverage include bylaw or building code upgrade costs?
✅ Have I told my insurer about renovations — a finished basement, a new kitchen, an addition?

The renovation trap

Improvements that raise your rebuild cost do not update your policy automatically.

If you have renovated and not told anyone, that is this week phone call.