Insuring Bio-Based Buildings in Canada
what natural builders need to know before applying for coverage

by Emiline Layfield, Building Biology-informed Healthy Home Consultant and Licenced Realtor®

As interest grows in straw bale, hempcrete, wood fibre, cellulose, mass timber and other bio-based building
systems, one practical question keeps coming up: can you insure a natural building in Canada?

The short answer: often, yes — but it usually takes more preparation than insuring a conventional building.
The challenge isn’t that bio-based buildings are inherently uninsurable. It’s that Canada’s insurance industry
has far more historical claims data and standardized underwriting practice for conventional construction. Less
familiar assemblies can trigger extra questions, a referral to an underwriter, or, with some insurers, outright
restrictions.

Insurance Is Not the Same as Code Approval

A building permit, mortgage approval and property insurance are three separate hurdles. A natural building
may satisfy the local building authority through prescriptive code, an approved product, or an engineered
alternative-solution pathway — but an insurer still makes its own, independent assessment of risk.

Natural Resources Canada has identified regulatory and market acceptance as barriers to scaling bio-based
construction, and has recommended simpler performance-based pathways for innovative materials that don’t
yet have established certification or prescriptive code recognition.

What the Canadian Experience Tells Us

A CMHC-supported study, Straw Bale Construction in Atlantic Canada (2006), profiled 34 straw-bale homes
built between 1993 and 2006. Twenty-one carried home insurance. Among owners who applied and were
declined, the refusals were reported as being almost exclusively tied to wood as the primary heat source —
not the straw-bale walls themselves. Engineering involvement and documentation helped projects move
through approvals.

That precedent is encouraging, but it isn’t a guarantee. Underwriting guidelines vary considerably between
insurers and continue to evolve.

Some Systems Remain Challenging

The landscape isn’t consistent across bio-based systems. Sagen’s current residential mortgage-insurance
guidelines specifically list straw-bale and earth-dome properties as ineligible for mortgage insurance. That’s
mortgage insurance, not homeowner’s property insurance — but it shows how unconventional construction
can ripple through the wider financing process.

Mass timber is moving the other way. NRCan has funded a Mass Timber Insurance Action Plan to investigate

systemic solutions to insurance barriers, and the federal government’s December 2025 forest-sector
announcement specifically included action to address insurance barriers to wood construction. That work
matters beyond mass timber: it signals that insurance itself is increasingly recognized as a barrier to scaling
lower-carbon construction in Canada.

Before You Build: Involve Your Insurer Early

Don’t wait until construction is complete to investigate insurance. Ideally, start conversations with an
experienced broker during design development — and certainly before committing to an unconventional
assembly. Be specific about the proposed construction rather than describing the house simply as “natural” or
“alternative.” An underwriter needs to understand what the building actually is and how it performs.

Prepare an Underwriting Package

A well-documented project is easier to evaluate. Depending on the building system, the essentials are:
• Architectural and structural engineering drawings, plus the applicable building-permit code pathway
• Detailed wall, roof and foundation assemblies, with moisture-management strategy
• Fire-resistance information and details on any wood-burning appliances
• Manufacturer technical data and certifications, where applicable
• Builder/consultant qualifications and comparable Canadian projects using the same system
A full documentation checklist is available from ONBC on request.

Ask the Right Questions

When speaking with a broker or insurer, ask whether the proposed assembly is accepted as standard
construction, accepted subject to additional documentation, referred to specialized underwriting, subject to an
added premium or conditions, or excluded outright by that carrier.
A rejection from one insurer doesn’t establish that a building is uninsurable across the Canadian market —
appetite differs between companies. For unusual projects, an independent broker with access to multiple
carriers can be especially valuable.

Think About Replacement Cost — and Construction Insurance

A custom straw-bale, hempcrete, timber-frame or earthen building may need specialized trades and materials
that standard replacement-cost assumptions don’t capture. Ask how your insurer calculates replacement
value.
And remember: a future homeowner’s policy doesn’t automatically cover the build itself. Discuss course-of-
construction or builder’s-risk insurance, plus contractor and subcontractor liability, before work begins —
particularly where innovative materials or owner-building are involved.

The Bigger Opportunity for Canada

Canada is actively encouraging renewable, low-embodied-carbon construction materials, and federal
programs are supporting advanced wood and bio-based building products. But innovation in materials needs
to be matched by innovation in the systems around buildings — codes, financing, appraisal and insurance.
Canada’s Forest Sector Transformation Task Force has gone as far as recommending a nationally available
insurance instrument to help insurers gain experience with mass timber and modern methods of construction
— a model natural building could eventually point to.
Natural builders have been constructing durable buildings in Canada for decades. Better documentation,
research, standardized testing and dialogue with insurers can help move these systems from being seen as
exceptions toward becoming familiar, well-understood parts of Canada’s building landscape.

ONBC Wants to Hear From You

Have you insured, financed, designed or built a straw-bale, hempcrete, light-straw-clay, cob, cordwood, wood-
fibre or other bio-based building in Canada? We’d like to know what system you used, where, whether you
got insurance (and what it took), and which brokers or insurers understood natural construction.
Share your experience with ONBC — it helps build a clearer picture of the Canadian market and shows where
better guidance, research and advocacy are needed.

Disclaimer
Insurance availability and underwriting requirements vary by insurer, building, location and over time. This article is
general educational information and should not be interpreted as insurance, legal, engineering or financial advice.

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