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Thread: Can insurance companies refuse house insurance for not meeting code?

  1. #1
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    Default Can insurance companies refuse house insurance for not meeting code?

    So with all the wonderful new changes to the building codes in Canada and Alberta I started to wonder about this. Can insurance companies refuse to offer insurance on homes with attached garage homes that no longer meet the current up to date code.

    The specific code requires all attached garage homes to have proper insullation, poly, gypsum board and minimum 1 coat of drywall compound to the complete garage for an added fire stop to the home. Unfortunately it has nothing to do with the limiting distances from house to house but rather creating a fire stop between the garage and home to protect the rest of the house.

    It's just a big question I am having since we are trying to insure our parents home after my dad passed away and this is a nightmare. We are working on rennovating it so we can sell it but getting insurance in the meantime isn't being friendly to us.

    I tried telling the insurance company that there must be thousands of homes in Calgary that are built in the exact same way. I personally don't see how this is a huge issue and even why it was added to the building code. I spoke with municipal affairs and they just quoted me the fact that damage caused by fires in garages have increased by X number of dollars since the 1980s.

    They would not tell me how many fires exactly though as i'm sure this number hasn't increased significantly over the years just the supposed value of the damage has gone up.

    Also under the new codes many many many homes in Calgary no longer meet code that were built just six months ago. Specifically doing with limiting distances from house to house and side windows and vinly siding.

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    If it just required drywalling the garage interior, why not do it?

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    No right now it has what I will call "ghetto" insullation that is by no means R12 and old old old OSB. The home was older than 25 years which is why insurance companies want to make sure these days the house isn't a shit hole apparently. Very annoying.

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    This doesn't make sense; I'm building a new home right now, and they are not insulating the garage, let alone drywalling it. I can't imagine that they would be allowed by the city to build houses that don't meet code...

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    My brother designs houses for a living, and he thinks that's ridiculous. He doesn't know the insurance industry, but housing codes are being constantly revised - there are pages of code revisions every few months. There's no way that any house (even brand new ones) could keep up with the revisions.

    I'd be talking to a different company, because it sounds like this one is trying to screw you. There are a lot of companies out there - no need to deal with idiots like that.

    Of course, unless there's more to the story that you're not telling, or don't know yourself...

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    There has to be more to this story. When we write a new house policy we don't even ask questions about the garage (regarding this stuff anyway). For what it's worth, an insurance company can deny you a policy for ANY REASON THEY WANT. It's not like auto insurance where they MUST provide you with coverage. If your broker is telling you it's the garage insulation then something is missing.
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    Originally posted by Kloubek
    This doesn't make sense; I'm building a new home right now, and they are not insulating the garage, let alone drywalling it. I can't imagine that they would be allowed by the city to build houses that don't meet code...
    On an attached garage, the walls that are part of the home are required to have vapour barrier, insulation, drywall and to be taped (prevents CO seepage).

    All other walls in the garage can be studs and exterior only.
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    Insurance company can do whatever they want. The bright side is, there are more than 1 insurance company in town. So ask a few others.

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    You don't really mention what your reno involves... but... Here's the basics - those reno's have to meet the current building code requirements.

    So if you were adding an attached garage to a 1905 built structure, the new garage would have to meet current code requirements - and modifications done to the existing structure would also have to meet those code requirements. Basically what that meant would be yes - you'd have to drywall insulate and v/b the garage and adjoining wall in the house - but no you wouldn't have to rip out all the drywall from the house to replace that knob & tube wiring (whole different bag o worms with insurance)

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    Thanks for the input guys. And just for the record for any of you. The new building code states this and there is no exceptions.

    Any attached garage must be completely insulated with R12 or better insulation, have poly installed, gypsum board and one coat of drywall compound throughout. Or the garage may have a sprinkler system installed.

    The reason the insurance company is raising such a stink is only because my parents let the insurance lapse. Sure enough there was issues with the shingles which are now 30 years old and needing to be replaced. Since the home is not detached they are raising the issue. I have talked to a few different companies right now all bringing up the same issues. It starts with the roof and then they start adding on other crap.

    I am also building a brand new house right now and they are forcing us to drywall the garage. Oddly we are building out in langdon and the garage is only attached to the home by roughly six linear feet where the corner of the garage meets the home. I have called municipal affairs asking for the case studies they did when changing this code because it is a fairly major change they have made in requirements of fire safety.

    We are being tagged for an extra $5,000 out there because of this crap. I just can't see how many fires literally start in the garage area of home. Fact is I wanted an OSB finish in the garage and not drywall. The regulations they passed regarding vinyl siding, sofits and windows is much worse than the garage stuff and I feel sorry for anybody building in Calgary now with this crap. This will easily raise the price of a house by $10,000-$15,000 just to meet the new safety requirements.

    I just feel overly nervouse when Im rennovating this house without insurance on it. Knowing I am putting crap loads of work into it. It sucks because I am going to have to replace everything in the garage because of it.


    The renos we are doing are fairly straight forward. We have removed all the old floor less the sub floor which was still in good shape. We then re-inforced it with tongue and groove OSB throughout. removed the stipple ceiling throughout the home, had to re-insulate certain parts of the house where the original builder simply didn't put insulation. We had to get a bunch of permits for the electrician to come in an re-wire and add a bunch of circuits. It's not a huge reno by any means and right now I'm roughly half way done it.

    We just need to get a fair return back on the property for my mother. She had a nervous breakdown when it all happened with my dad passing so it just adds to all the crap. The house has not been maintained well though for the past 10 years or so which makes matters worse.
    Last edited by quazimoto; 06-03-2009 at 09:54 AM.

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    How does the insurance company knows theres problems with the roof? I dont remember being asked any questions about the roof at anytime Ive insured a house.

    Originally posted by quazimoto

    The reason the insurance company is raising such a stink is only because my parents let the insurance lapse. Sure enough there was issues with the shingles which are now 30 years old and needing to be replaced. Since the home is not detached they are raising the issue. I have talked to a few different companies right now all bringing up the same issues. It starts with the roof and then they start adding on other crap.

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    As with most safety codes, if you can prove that the installation met code at the time then it is grandfathered and protected under that code. If you were to modify the structure, then you are required to ensure that it is up to NEW code. This is how it works for the utilities anyways.

    As for the insurance question, I will leave that to people who know insurance.
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    general speaking, if the house is 25 or above of age. most insurance company will require update on roof, electrical, plumbing. furnace, hot water tank plus pics of the dwelling.

    to the O.P concern, i think the main issue to insurance company is the policy is been lapse plus it's in process of reno right now(hence-------------vacant??)

    there is no company like to insure vacant property at all. the best option for you is go back to the regular insurance company/broker to discuss with them and hopefully the underwriter again to accept this risk. it may not be the best coverage at the end(only cover fire nothing else?) but better than nothing is insuring.

    hope this info helps
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    Well I solved the vacant problem a few weeks back when I moved in temporarily while doing the renos. It makes life a little easier time wise not having to travel around. Plus my new home won't be ready until December.

    I think I've called 4 insurance companies now which all had the same issues. I'm going to see if I can try to explain it that the code back then was not the same so it shouldn't matter if the garage is insulated or not. This seems extremely stupid to me. If your garage is going to catch on fire the house is going to be screwd anyways. I really can't see how well insulation and drywall can help the remainder of the home.

    The roof is one of the issues though and we are re-shingling right now since we knew this would have to happen in order to sell it.

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    When you said that your folks let their insurance "lapse", it will show a cancellation for non-payment on their record. That is probably causing 80% of your problems. If the roof is over 25 years old, there's the other 20%. This business of the garage doesn't even matter.

    We'd be able to write you but IT'S GONNA COST. With two factors like the non-pay and the roof, generally only the higher risk (means much higher price) specialty companies will get involved. Their coverage isn't anywhere near as good either.
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    The Current (HIRF) Hi Intensity Residential Fire revisions to the Alberta Building Code came into effect on May 3 of this year, if you had a building permit issued before then you do not have to meet these requirements, that is why there are still new homes being built right now that do not have to have the interior of the garage finished.

    Insurance companies often check to see if permits were pulled for buildings before insuring them, just to make sure that they meet a minimum standard. If there are no permits they will often not insure the building.

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    Yay was able to get the home insured. Just required a slightly higher premium. Funny how some insurance companies will take it and other won't. It's through a major bank as well so shouldn't be a problem.

    Now side note, this amendent to the building code was added for protection only to insurance companies AND NOT home owners. I have been having this battle with municipal affairs where they are convinced it will help save lives.

    For some reason we must do all this work to our garage to fire proof it, but yet there is no requirement for a smoke detector to be networked in the garage area. Now call me silly but I would think it would make more sense to network a smoke detector in the garage so we'd hear the alarms going off.

    What the insulation will do though is give the added fire stop which gives the fire department more time to get there and hence reducing the cost to the insurance company. I'm willing to bet this amendent was 100% pushed through by insurance companies.

    If you are building a new home just an FYI you will see an extra $5,000 - $15,000 in added cost for the new fire proofing measures. For new homes in Calgary it has to due with upgraded vinyl siding, fire proofing sofits, special windows for the side of homes, etc. What really pisses me off is they don't base any of these changes on fact, but rather theoretical ideas.

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    Originally posted by Gspotracer


    Insurance companies often check to see if permits were pulled for buildings before insuring them, just to make sure that they meet a minimum standard. If there are no permits they will often not insure the building.

    I think you over estimate the amount of investigation the insurance companies do when writing a policy.

    After a large fire claim, maybe. At the time of underwriting, never.
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    Originally posted by Masked Bandit



    I think you over estimate the amount of investigation the insurance companies do when writing a policy.

    After a large fire claim, maybe. At the time of underwriting, never.
    I've had insurance companies call me to confirm the status of building permits on buildings they are looking to insure.

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    Originally posted by Gspotracer


    I've had insurance companies call me to confirm the status of building permits on buildings they are looking to insure.
    On generic, straight forward single family residential buildings?
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