|Are you planning to remodel part of your home? Or are you about to build a new addition onto the dwelling? In either case, you need to consider what impact this is going to have on your home insurance needs. You need to make sure that you are protected during the project and that your coverage will continue as you expect when you're done. This will require some attention to detail.
Can a Home Remodel Change Your Home Insurance Rates?
Remodeling your home will impact the cost of your homeowner’s insurance. In some cases, it will increase your rates, but in others it might cause your rates to drop.
Making significant upgrades to the home will increase the value of your property. It may also now cost more to replace, because of better quality appliances or even more square footage. To make sure you have enough coverage to rebuild your renovated home, you’ll need to increase your coverage. Increasing the coverage will standardly increase your insurance premium.
Additionally, you may see higher insurance costs if you add features to the home that make it more of a liability. For example, installing a swimming pool or elevated deck could significantly increase the risk of someone getting hurt in your home. With more liability exposures you’ll want to make sure you have enough liability coverage. You should consider increasing your liability coverage or buying an umbrella policy…or both.
Still, if home upgrades increase the safety features in the home, then you might see your rates decrease. After all, the safer the home, the lower your risk might be of filing a home insurance claim. For example, if you re-wire the home, install a security system or replace your roof, you may now be eligible for discounts which will decrease your rate.
Do You Need Coverage During Construction?
While a remodeling project is ongoing, your homeowners insurance needs may change depending on the level of construction.
On one hand, for small, do-it-yourself projects, your existing home insurance coverage could be adequate. However, if you're making major structural changes, you may need to acquire a builder's risk policy or course of construction policy. This gives you coverage for damage that occurs during construction, such as from hazards like weather, fire or theft.
If you use a licensed, bonded, and insured contractor, then they should carry the appropriate liability and workers compensation insurance. But you should verify that they have what you need with your own insurance agent so there aren’t any gaps in coverage. For do-it-yourself projects, you'll need to get any extra insurance on your own.
What Do You Do After Construction?
After you finish your remodeling project, keep photos of the work and all receipts to support any future insurance claims. If you haven't already, notify your home insurance company about the improvements you've made in case you need to make any adjustments to your policy and again to make sure you’re properly covered if a loss occurs. Never hesitate to call your insurance agent. We’re here to advise you and help you in any way.