Stucco Home Insurance: How Does EIFS Affect Insurance

Stucco (or more accurately, EIFS) is enormously popular on homes in and around the Greater Toronto area due in large part to it’s great aesthetic appeal and it’s ability to insulate, thereby reducing heating and cooling bills. It’s become a “hot topic” (pun intended) for insurance companies – moreso in the U.S. than Canada – over the past few decades because of problems if improperly installed. Problems which range from moisture intrusion and entrapment to the combustibility of it’s components and decorative accents.

Before starting any home improvement project, it’s a good idea to call your insurance provider to check whether or not it will affect your home insurance policy. Failure to contact them and update your policy when changing something as drastic as the exterior walls on your home could actually void your home insurance warranty.

Think about it… let’s say you retrofitted your home with stucco in July of 2012 at a cost of $12,000 and were happy with the contractor – he was polite, on time, did everything according to the contract and finished on a good note. 3 years down the road (it’s 2015 now) you have a building inspection completed for termites because it’s been an issue in your neighbourhood. During the inspection, the home inspector doesn’t find any termites, but notes that you have moisture trapped in your walls – around the windows, wherever. Remembering that mould is somewhere in your insurance policy, you contact your insurance provider who sends someone out to investigate and they’re shocked that your home doesn’t match what’s on the paperwork. Your insurance company won’t cover the damage any more, because what you’ve been paying for does not have EIFS-related coverage. Let’s take a look at some of the damages you’ve incurred:
– Insurance: 36 months x $200/month = $7200
– Removal of EIFS: $4,000
– Removal and repair of mould/moisture damaged wall section: $7,000
– Reinstallation of EIFS, done properly: $13,000
Total: $31,200

That’s $31,200 out-of-pocket expense that is related to your one forgotten phone call to your insurance company. Note that properly installed EIFS usually is slightly (give or take 10%) more expensive than the shmuck who cut his costs by cutting required material out of your home. Good luck finding him too – the average “stucco contractor” is in business roughly 2 years before closing it down and opening another or going to work with a friend.

If properly installed, and done in accordance to local building codes (following fire code where necessary), EIFS is a worry-free system that will last decades and save you thousands of dollars in heating and cooling bills. The trick then, is to find the right contractor – one that has a proven track record and can be vouched by manufacturers and previous clients. Services like Stucco Toronto can put you in touch with multiple contractors, are provide a neutral – 3rd party approach to your project.

The takeaway from this article is this:
1. Make sure you contact your home insurance provider to include coverage of EIFS, which may or may not affect your policy.
2. Compare quotes and get recommendations from suppliers/previous-customers, but don’t try to force a contractor to lower their prices to the point where they are going to cut corners – you’re the only one that will suffer in the end.

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  • What is Stucco?

    "Stucco" is typically what people in the Toronto area use when they're looking for EIFS (Exterior Insulation Finish Systems, or "synthetic stucco"). We use the two terms interchangeably.

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