You finally upgraded the kitchen like you’ve talked about for years. New fixtures and appliances. All granite countertops and real wood cabinetry. Have you called your insurance agent yet?
After years of talking about it, you finally extended part of your home to add an extra room. It provides much needed extra space for your family. Did you let your insurance agent know before the work started?
From new roofs and pools to remodels and add-ons, when you renovate your home, it impacts your homeowners insurance. Here’s what you need to know.
Increase Your Dwelling Coverage Limit
Simply put, when you put money into your home to make updates, changes, or additions, you increase the amount of money it costs to replace or repair your home. If something catastrophic happens, you need to know your homeowners insurance limit is high enough to pay to rebuild your home from the ground up. More importantly, insurance companies require a home to be insured for at least 80 percent of the replacement cost. If your dwelling limit is too low, a claim could be denied right when you need help the most.
This policy limit is known as the dwelling coverage limit. Here are a few examples of renovations that could impact this amount.
- Adding extensions / additions onto your home
- Renovating a kitchen especially when replacing old, less expensive materials with newer, costlier options.
- Replacing your roof, though you may also qualify for discounts when your roof is new and up to current code.
- Installing a pool. This not only increases your rebuild value, but also your liability. Insurance may cover the new pool but only if you include certain requirements like fencing, gates, and/or enclosures.
Anytime you do work on your home that improves it in some way, contact your insurance agent. We can tell you if or how it will impact your homeowners insurance.
Call Before You Renovate
The next time you plan a renovation project, call your insurance agent first. Many homeowners insurance policies don’t cover homes when they’re “under construction” because of the increased risk of theft, vandalism, or storm-related damage. Not every renovation project will fall under this guideline but many will. When that happens, you may need a “dwelling under construction” endorsement or to talk to your builder about their builder’s risk insurance so that your home is covered until the work is completed.
Don’t get caught without enough home insurance to cover your home after a claim. If the work is already done, give us a call here at Charlotte Insurance and let’s talk about how your policy needs to adjust. And if you haven’t started yet, give us a call so we can make sure you’re covered until the work is done and your policy reflects the new value when the work is complete.