If you haven’t reviewed your home’s rebuild value in the past 12–18 months, there’s a good chance you’re underinsured. BC homeowners are being squeezed by construction inflation, supply chain delays, labour shortages, and stricter building codes—all of which can push a claim well past the limit on your policy. The result? You, not the insurer, end up writing the cheque for the shortfall.

In this post, I’ll walk you through why underinsurance is getting worse in British Columbia, where the most common gaps hide, example claims scenarios, and the exact steps you can take today to make sure you’re properly protected.

Why underinsurance is skyrocketing in BC

A perfect storm of factors is driving rebuild costs higher than what many policies were originally set for:

• Construction cost inflation: Materials (think lumber, roofing, drywall) and skilled labour have increased dramatically over the past few years. Even a 10–20% jump can blow through a policy limit fast.
• Code upgrades & bylaws: Municipal and provincial building code changes often require you to rebuild to a higher standard than before. If you don’t carry enough Bylaw/Ordinance coverage, you pay the difference.
• Additions & renovations without telling your broker: Finished basements, new rental suites, backyard studios, high-end kitchens—if you don’t update your policy, your limit may not reflect your real exposure.
• Additional Contents:  Over time, furniture, electronics, art, jewelry, and luxury goods accumulate. But your contents limit might not have kept up with the increases.

What could happen?

Wildfire in the Interior: The $180,000 shortfall

The situation: A family in the Okanagan lost their primary residence in a wildfire. Their policy was written five years prior and hadn’t been updated since.

The problem: Their rebuild limit was 18% below the updated replacement cost estimate. Code upgrades (including fire-resistant materials and sprinkler requirements) added another 7%.

The outcome: Even with an extended replacement cost endorsement, the family still faced an out-of-pocket bill of $180,000 to complete the build and meet code. Their Additional Living Expense (ALE) limit also expired before construction finished, forcing them to dip into savings to cover mortgage and rent for an extra four months.

What would have helped: Annual reviews, a guaranteed replacement cost policy (where available), higher Additional Living Expense limits, and a clear review of new bylaw / code costs.

Detached garage + suite in the Lower Mainland: The forgotten outbuilding

The situation: A homeowner added a heated detached garage with a rental suite above it. They told their contractor, but not their broker.

The problem: When a fire damaged the structure, the “other structures” limit (often 10% of the main dwelling limit) wasn’t enough to fully rebuild. The cost of bringing the suite up to current code pushed the shortfall even further.

The outcome: The claim paid to the limit, but there was still a significant gap. The lost rental income also wasn’t covered because loss of rental income wasn’t added to the policy.

What would have helped: Updating the policy immediately after the build, increasing other structures and rental income coverage, and reviewing bylaw/code and ALE limits.

Common places BC homeowners are underinsured (and don’t realize it)

• Rebuild/Replacement Cost: The biggest shortfall is often here.
• Bylaw & Code Upgrades: Especially for older and heritage homes.
• Additional Living Expenses (ALE): With build times now often 18–30 months, many ALE limits run out before you’re back home.
• Other Structures: Detached garages, carriage houses, studios, sheds, retaining walls.
• High-Value Contents: Jewelry, watches, art, collectibles, wine, bikes, instruments. These often need to be scheduled.
• Service Line Coverage: Buried water/sewer lines on your property aren’t always covered.
• Water Damage & Flood Endorsements: Overland water, sewer backup, groundwater, coastal flooding—different perils, different endorsements.
• Earthquake Coverage & Deductible: If you live in the Lower Mainland, Vancouver Island, or coastal BC, review both the limit and the % deductible. Could you readily access that cash tomorrow?
• Short-Term Rentals or Rental Suites: Misclassified occupancy can void or limit coverage.

How to make sure you’re properly insured (starting today)

• Ask for a fresh replacement cost evaluation. Use a professional appraisal if your home is custom, heritage, or high-value.
• Increase your Bylaw/Ordinance coverage. Especially critical for older or heritage properties.
• Review ALE limits. Can you realistically live elsewhere for 18–30 months on your current limit?
• Inventory your contents. A smartphone video walkthrough + spreadsheet is a great start. Schedule high-value items.
• Tell your broker about renovations, additions, suites, or new buildings immediately. Don’t wait until renewal.
• Check your co insurance clause. If it’s there, make sure you meet or exceed the required percentage.
• Consider specialty endorsements: Sewer backup, overland water, service line, equipment breakdown, earthquake, and high-value collections.
• Align insurance to your real risk tolerance and liquidity. If you don’t want to self-insure a big deductible or coverage gap, don’t.
• Schedule an annual review. Costs and codes move fast—your coverage should keep up.

A quick renewal checklist

Before you sign off on your next renewal, ask:

• Has my rebuild value been updated in the past 12–18 months?
• Will my ALE limit cover me for at least 18–24 months?
• Have I renovated, added a suite, finished a basement, or built an outbuilding?
• Do I have enough Bylaw/Ordinance coverage for code upgrades?
• Are my high-value items (jewelry, art, wine, bikes, instruments) properly scheduled?
• Do I rely on rental income from a suite? Is that income insured?
• Is my policy subject to co insurance? If so, am I compliant?
• Do I have the right water, flood, or earthquake endorsements for where I live?

Final thought: Peace of mind costs less than catching up after a loss

Underinsuring your home isn’t just a paperwork problem—it’s a financial risk that becomes painfully real at claim time. One conversation today can save you six figures tomorrow.

Want a no-pressure coverage audit? Let us review your current policy, rebuild values, and endorsements, and tell you exactly where you’re exposed—and what it would cost to fix it.

Let’s make sure your policy will do its job when you need it most.

Contact us today: info@schillinsurance.com