Roasted marshmallows? Check. The perfect backdrop for holiday cards? Check. Cheaper heating bills? Check. More expensive premiums? Sadly, check. A wood-burning stove or fireplace has many benefits, but before you install one, make sure you understand how it will affect your home insurance bills.
It shouldn’t be a surprise that having open flames in your home will raise your premiums: no matter how modern your fireplace or stove is, the sparks increase the chance your insurance provider will have to pay a claim, especially if you live with small children or pets. Price changes depending on the insurance company, the type of fireplace or stove, and whether or not it’s the home’s main heating supply, but can add $100 or so to your annual premium.
Many insurers will require your stove or fireplace to pass a Wood Energy Technology Transfer (WETT) inspection before they’ll cover your home. An inspector checks if the stove was correctly installed, whether it meets building codes, and whether it’s safe to use. It’s especially important to get an inspection if you’re insuring a cottage or vacation home where the owners did a DIY installation job one weekend, and may not have dotted every ‘i’ and crossed every ‘t’.
Insurers may also require annual fireplace inspections. Common safety issues are buildups of soot or creosote, not having a glass or mesh screen to prevent sparks from lighting the carpet on fire, not having a chimney cap to prevent animals from tumbling down, and not having a carbon monoxide or smoke detector.
If you decide to install a wood stove or fireplace, make sure you inform your insurance company before you do so. While you may save some money by withholding that information, you’re putting yourself at risk. If you do suffer a loss, especially if it’s related to the stove or fireplace, your insurer will found out. And they could say you didn’t inform them of a material change in risk, decide not to reimburse you for the damages, and void your policy.
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In 2007, 74-year-old Hubert Thomas’s wood stove started a fire in his home. The New Brunswick man’s insurance company, Aviva, voided his comprehensive home insurance policy and denied him coverage because he had installed the stove in 2001 without telling them.
In Thomas’s initial application for insurance, he had said the home was primarily heated by electricity. He installed the wood stove a few years later to cut down on his heating but, but still mostly relied on electricity, and Aviva never asked about secondary sources. They also never specifically asked whether he had a wood stove. The judge ruled in Thomas’s favour and awarded him legal costs as well as more than $20,000 in damages, and in 2010, the appeals judge upheld the ruling.
But while there may be insurance loopholes, ask yourself if you want to risk a three-year court battle to find them before you call that fireplace installation company.
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