Would your homeowners insurance not cover that? Mine would.

You might want to really do a careful read of your policy, because almost all of them have provisions about requiring work to be completed by licensed tradespeople.

I've heard people say this before, so a few years back I got all of my friends and family to send me a full copy of their insurance policies. 0% had any lines saying anything regarding work being performed by licensed tradespeople, or even that work must be done to building/etc codes. This was across multiple insurance companies in 3 provinces (Canada), for policies on condos, semi-detached, and detached homes.

I have my doubts that such a thing exists outside of extreme circumstances or internet commenters' imaginations.

Definitely not the case in Australia e.g. https://www.gio.com.au/know-more/insuring-your-home/things-t...

Insurance for damage due to building works is separate and required to be carried by the principal contractor for work over $20,000.

Which is to say, if I don't check they actually hold a policy, the residential insurance is not going to pay out.

I am extremely skeptical you have interpreted those policies accurately. For example, the one above doesn't require anything of anyone renovating stuff: but it also just won't pay for any associated damages.