How Do Home Renovations Impact Homeowners Insurance?

There are many goals a homeowner may have when taking on a home renovation project, from replacing worn-out or outdated elements to improving energy efficiency or making more room for a growing family. However, regardless of the reason or the type or scale of the upgrades, these changes often have unexpected outcomes. It is essential to speak with your local insurance professional before you dig into any home improvement project—even one that seems minor. Based on your specific plans, including whether the renovation will require you to vacate the house for a period, your project may fall outside of the guidelines of your Home Insurance Policy. By discussing your plans with your agent, they will be able to make policy adjustments or provide alternative coverage options if needed.

What Kinds of Home Renovations Require a Homeowners Policy Change?

Many of today’s most popular property renovation projects may have a significant impact on a home’s Replacement Cost Value and/or increase the risk of an injury occurring and trigger the need for a homeowners policy update, including:

• Adding a room or full second story
• Building a garage
• Remodeling a kitchen or bathroom
• Finishing a basement
• Converting an attic into an extra bedroom
• Overhauling home systems, e.g., plumbing, HVAC, or electrical
• Putting in a swimming pool or hot tub
• Setting up a home office
• Installing a new roof
• Replacing flooring with higher-end or unique materials

Talking to your insurance professional about home improvement plans like these is not something you should delay. If damage or an injury occurs in the part of your house that has been renovated but your policy has never been updated to reflect these improvements, there could be a gap in coverage, denial of a claim, or complete loss of coverage.

How Do Home Renovations Impact Home Insurance Premiums?

If the upgrades you make to your home require increasing your Home Insurance Coverage, your policy premium may go up as well. However, not all improvements to your house will mean you pay more for your insurance. Depending on your insurance company, there may be some updates you can make, like installing home security and water leak detection systems, that could earn you a homeowner discount or credit and also help you better safeguard your house.

Even if you have just started to imagine the renovations you would like to make to your house, reach out to a local insurance agent now. They can review and update your Home Insurance as needed to make sure your house is covered appropriately before, during, and after your project.