Homeowners Insurance and Renovations: Here’s What You Need to Know

Written By Charlotte Insurance on October 18, 2021. It has 0 comments.

a couple discussing their home renovation project along with their insurance needs

Even small home renovations come with a lot of stress. It’s exciting to improve your home in some way, but there are also a lot of details to worry about.

Don’t let your home insurance be one of those stressors. Here’s what you need to know before you start renovating.

Will Your Standard Homeowners Insurance Policy Be Enough?

To some extent, your current homeowners insurance policy will cover home renovations you make. But it won’t fully cover everything, depending on the type of renovations you have planned.

If the changes will increase the cost to rebuild your home, you may need more coverage. Examples include: Adding on a new room to your home or upgrading the materials used in an existing room, like your kitchen.

At the same time, you may not have enough liability coverage to protect yourself from the danger of a renovation. People working in or visiting your home will have more hazards that could cause potential injury or damage. Depending on the situation, you may be liable for their medical expenses or property damage.

The most important thing to do is contact your insurance agent before you start the renovations. This will give us a chance to discuss your plans and figure out what, if any, changes to your homeowners policy need to be made.

Extra Coverage You Might Need for the Renovation

Whether your homeowners insurance coverage should be updated or not depends on many factors. But there are some common increases or additions that may be needed during and after your renovation. Here are a few to consider:

  • Increase your policy limit if the cost to rebuild your home increases after the renovation.
  • Increase your liability limits during the renovation, especially if you’re doing DIY. If you hire a contractor, they should have their own insurance coverage.
  • Increase your liability after the renovation if the new addition creates new potential liability for you as a homeowner. Examples include installing hot tubs or swimming pools.
  • Increase your personal property coverage if you need to buy new items like appliances and furniture for the renovation.
  • Add “dwelling under renovation” coverage to protect the building materials needed for your renovation. The materials will be covered both en route to and at your property. This also includes coverage for foundation collapse during the renovation.
  • Add “vacant home insurance” if your renovations will require you to vacate your home for at least 30 to 60 days.

Will Your Premiums Increase After the Renovation?

While renovating a home is an exciting (albeit stressful) process, many homeowners worry it’ll increase their insurance once the work is complete. The answer is…it depends.

If the renovations increase the cost to rebuild your home, then yes, your premiums may increase. This could be because of a new room addition, an increase in liability, or an upgrade in materials used in a room, like a kitchen.

Sometimes, though, a renovation makes a home more secure. Updating your home’s plumbing or installing storm shutters may protect your home against potential disasters. This could result in your premiums going down because of discounts.

The question about your premiums is one for your independent insurance agent to help you answer. It’s why calling before the renovation even begins is so important.

Thinking of renovating your home? Before you do, give us a call so we can help you protect your home during and after. Is the work already done? Contact us so we can make sure you have enough homeowners insurance, at the best price, for your home.

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