How Can Renovations Affect My Home Insurance?


You need to understand the relationship between home renovations and insurance. Are you excited about adding new features to your home or remodeling existing structures? It could be as simple as new wallpaper, adding a ceiling detail, or fitting a designer lighting or jaw-dropping chandelier. You could even consider an integrated remodel with a built-in fridge, cabinetry, or wine cellar. You may decide to add a little aesthetics with a free-standing bathtub, a frameless shower, fire pit, or a showstopping front door. All of these ideas can help enhance your home, but don’t forget to talk to your insurance carrier about them too!

It is estimated that renovations increase the asset value of a home by 25 percent. However, most home insurance holders do not obtain new coverage after renovation. Many renovations impact your home insurance. Some renovations increase the value of your home, add features not covered in your existing policy, or render the coverage impracticable, and leave you vulnerable to a loss. Other home renovations may be upgrades that increase security features, which may cause your insurance company to lower the premium. It is worthwhile to understand home renovations and insurance, as it concerns you. Here are some renovations that impact your home insurance.

1. Building a pool

Adding a pool in your home increases the risks of injury and death which have a high impact on home insurance. A pool with a slide or diving board further increases risk, while one with a fence and lock may be considered less risky. Either way, building a pool increases personal liability protection needs by up to 500 percent of the standard policy. With such a significant impact on personal liability, it is paramount that you discuss the addition with your insurance provider.

2. Redoing your roof

Some roof reinforcement, such as replacing with stronger roofing materials and fortifying with hail, leak, or wind-resistant features, may qualify you for a discount on premiums. However, redoing your roof may also increase your home’s value, which may require more coverage. Either way, an insurance agent will be able to inform you of the impact redoing your roof will have on your homeowner’s insurance.

3. Expanding your space

You may wish to maximize space in your home by making an extension, finishing a basement, or adding a deck. While you consider this, bear in mind that it also increases your home’s risk and value, hence requiring an adjustment in your policy. The risks of having a basement prone to flooding and having a staircase are essential considerations in home renovations and insurance. You need to contact your insurance carrier to re-evaluate your home’s value and determine whether an increased coverage is necessary.

4. Adding an office for home business

The pandemic has led to an increase in work from home solutions. Suppose your newly added home business deals with a large number of supplies, use specialized machinery, or creates heavy foot traffic. In that case, it will be advisable for you to see your insurer recalculate your home value, determine whether you will need more coverage, and adjust your existing policy or purchase a business policy.

5. Upgrading your kitchen

Giving your kitchen a facelift is as essential as understanding home renovations and insurance. Depending on the addition, upgrading your kitchen may either have an increased or decreased impact. Replacing laminated wooden countertops with granite countertops may mean an increase in the value of your kitchen, which the existing policy would not cover in the event of damage or disaster. Adding a fire extinguisher or fitting a fire alarm may increase your asset value but could also qualify you for a discount in premium. However, you will need to ask if you are eligible for a discount.

When considering a home renovation, you need to inform your insurer to know how much impact it will have on your home insurance. To protect the full value of your home, you will need to consider home insurance during a renovation. For assistance with all your coverage needs, contact an insurance professional at Westwood Insurance Agency today