When planning a home renovation, it’s easy to focus on design and construction details—choosing the perfect tiles, paint colors, or appliances. However, an often-overlooked aspect of remodeling is how it affects your homeowners insurance. Renovations can increase the value of your home, introduce new risks, or require additional coverage, making it essential to address insurance considerations before you pick up a hammer. Here’s what you need to know.
1. Notify Your Insurance Provider Before Starting the Project
Whether you’re adding a new room, upgrading your kitchen, or building a deck, it’s crucial to inform your insurance company about your plans. Major renovations may affect your home’s replacement value, which could impact your policy’s coverage limits. Your insurer can guide you on whether you’ll need to adjust your policy to ensure adequate protection during and after the project.
2. Confirm Contractor Insurance
Working with a reputable contractor is essential, but equally important is ensuring they have proper insurance. Ask for proof of:
- General Liability Insurance: Covers property damage or injuries caused during the renovation.
- Workers’ Compensation: Protects you from liability if a worker is injured on your property.
Request certificates of insurance before signing contracts to avoid unexpected liability during construction.
3. Consider Builder’s Risk Insurance for Major Projects
For extensive renovations, such as a complete rebuild or a large addition, you may need builder’s risk insurance. This temporary policy covers your home and materials during construction, protecting against risks like theft, vandalism, and weather damage. Speak to your insurance provider to determine if this coverage is appropriate.
4. Upgrade Coverage for Increased Home Value
Renovations like adding square footage, upgrading fixtures, or installing energy-efficient systems often increase your home’s value. Make sure your insurance policy reflects this higher value. If you don’t update your coverage limits, you could face a coverage gap, leaving you underinsured in the event of a claim.
5. Address New Risks After Renovation
Certain upgrades can introduce additional risks that require special coverage. For example:
- Swimming Pools: These may require liability coverage adjustments due to the increased risk of accidents.
- Home Offices: If your renovation includes a dedicated workspace, you might need to add business property or liability coverage.
- High-Value Additions: Installing expensive appliances or custom features might require additional personal property coverage.
Review your new risks with your insurance provider to determine the best course of action.
6. Take Advantage of Discounts for Safety Improvements
Not all renovations increase your premiums. Some upgrades, like installing a security system, reinforcing your roof, or adding fire-resistant materials, can qualify you for discounts on your policy. Inform your insurer about these safety improvements to maximize potential savings.
7. Document Everything
Keep detailed records of your renovation, including contracts, receipts, permits, and photos. This documentation will be invaluable if you ever need to file a claim related to the renovation.
8. Update Your Policy Once the Project Is Complete
After the renovation is finished, contact your insurance provider to reassess your home’s value and risks. Adjust your policy accordingly to ensure it provides comprehensive coverage.
Protect Your Investment
A home renovation is a significant investment in your property and lifestyle. By addressing insurance considerations early, you can ensure your hard work is protected. Don’t let unexpected gaps in coverage overshadow the excitement of transforming your home—partner with your insurance agent to keep your peace of mind intact.
If you’re planning a remodel and have questions about your homeowners insurance, reach out to us today. We’ll guide you through the process and ensure your home is fully protected, both during and after your project.