Home insurance and your backyard
A modern back patio with a garden, backyard seating, and a place to entertain and cook.

Transforming your backyard into the perfect outdoor oasis can be both a fun project and a worthwhile investment. You might have big plans to make your backyard a cozy space where you can host friends, have fun parties, or just take in a quiet evening under the stars. If you’re looking to make updates to your backyard, here’s what you need to know about how they can affect your home insurance.

Will backyard upgrades affect your home insurance policy?

Yes, upgrades to your backyard could affect your home insurance coverage and how much you pay. Any newly-built structure could increase the value of your home, and could also increase how risky it is to insure.

Let’s look at some backyard upgrades and the insurance you need to protect yourself and your updated space.

Will adding a swimming pool or hot tub affect my home insurance?

Having a pool or a hot tub in your backyard is like having your own tropical resort right at your doorstep. But, a pool or hot tub will increase the risk of slips and falls, and someone getting injured on your property. This is known as a liability risk, so you’ll need to make sure you have a high enough liability limit to cover any medical expenses or legal fees if something happens.

You also need to make sure you have coverage if the pool itself is damaged. A swimming pool is generally covered by your home insurance policy under your dwelling coverage or by adding an endorsement if it’s damaged by insured events like fire or lightning. Homeowner’s insurance can also protect against certain types of damage caused by a pool or hot tub, depending on the circumstances. For example, if your home is damaged because of water escaping from your pool or hot tub after a storm, it could be covered. But, if the pool hasn’t been maintained properly and water escapes, the damage wouldn’t be covered.

Adding a pool or hot tub will also raise the value of your home, so it will probably affect your premium as well. Talk to your insurance company, they can let you know the coverages you’ll need and the cost it’ll add.

Heads up! You must follow all local laws for having a pool, and have the required safety measures in place. Check your municipal government’s website for more details.

Is a fire pit legal and covered by my home insurance?

Looking to relive nostalgic nights at summer camp right in your own backyard, roaring fire and toasted marshmallows included? Before you think about installing a backyard fire pit, you need to make sure it’s legal. A good place to start is by searching your city’s website to find out if you’re legally permitted to have a fire in your backyard.

If everything’s good to go legally, the next step is to find out if your insurer actually covers homes that have fire pits. You’ll want to make sure you’re covered if a fire spreads and damages your property or the neighbour’s – or, if someone gets injured by the fire. Every insurer differs in what they do and don’t cover, so ask your broker or agent so you understand what’s included in your policy and what isn’t when it comes to fire pits.

What about cost? Well, typically insurance companies will charge extra if you have a wood-burning stove inside your home as a secondary source of heating, it might not apply in the case of a fire pit.

Are backyard pizza ovens covered by my home insurance?

Pizza ovens are becoming a popular addition to backyards – some are even DIYing it and building their own! But like fire pits, you need to find out if they’re permitted since they could be dangerous. Research your local bylaws to find out before going ahead.

Insurance-wise, once you’ve got the okay from the city, you’ll need to tell your insurer to find out if they’re willing to cover it – before you build. Pizza ovens could be a fire risk, and they’ll have to consider that.

What is a laneway house and will my home insurance cover one?

A laneway house is a residential unit that’s separate from the home you live in. It’s usually located in the backyard of a property, connected to a public laneway. A laneway house can:

  • Provide rental income to property owners
  • Provide housing for grown children, parents, or in-laws
  • Take advantage of existing infrastructure
  • Add residential units into neighbourhoods
  • Make underused laneways into safer public spaces

There’s a lot to consider when it come to this type of backyard structure. If you want to build a laneway house on your property, there are by-laws you’ll have to follow and permits you’ll need to get first. Learn about building a laneway house in Ontario and whether it’s right for your property.

Many insurance companies cover laneway homes as a detached structure under your main residence’s policy, so you wouldn’t need a separate policy. What’s a detached structure? A garden shed or garage are more common detached structures insured by a home policy. But, you do have to do your research and understand your policy fully. Detached structures are usually covered only up to a certain limit, so if something happens and the cost to repair or rebuild the laneway house goes above your limit, you’ll have to pay the extra cost out of pocket. On the other hand, some insurers offer separate policies for laneway homes. This could make things easier for you in the long run if that policy offers replacement cost.

Will it cost you more to insure a laneway home? Yes, regardless of which option you choose to insure it. There are a lot of factors that can come into play when insuring your laneway home. Make sure to consult your insurance provider to determine what coverage they offer for detached private structures, as you may discover they do not have the protection you need.

Will my home insurance cover an outdoor kitchen?

Looking to add an outdoor kitchen to your home? They provide extra entertaining space that allows you to stay with your guests instead of running in and out of your house while you’re prepping a meal. While an outdoor kitchen helps increase the value of your home, it’s also really important to consider liability risks. If you've added any special features to that outdoor space, such as gas lines or enclosed fire pits, your insurer will need to know about it since it raises the risk of an accident occurring. And if that accident causes an injury to another person or another person's property, your liability insurance needs may now be higher. While your original homeowner’s policy will usually cover other structures on your property, it can be limited to a certain amount. Since each insurance provider is different, always make sure to check with your provider for what that amount is.

Don’t let a small mishap ruin your plans for a great summer filled with fun social gatherings. If you’re upgrading your backyard, remember, you must keep your insurance company in the loop. And if an upgrade increases the value of your home, you may also see an increase in premiums – but, it’s definitely worth the added protection.

Protect your home and the things you love most.