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Before you start that enormous project, you need to know the building renovations that might affect your homeowners’ insurance policy. Ultimately, several factors could play a part in this. These factors can affect your decision-making and your desire to complete that project. Significantly, it’s important to remember that home improvements come with special considerations, particularly regarding Homeowners Insurance.
How Can Home Renovation Affect My Homeowners Insurance Policy?
Homeowners insurance coverage protects your home and personal items in case of unexpected mishaps, such as fires, tornadoes, and theft. If your 4-bedroom apartment, for instance, were to catch fire, your homeowners’ insurance policy would help rebuild the house and replace any lost or damaged possessions.
However, specific home improvements could increase the value of your property, and you may need to update your coverage limits to ensure you’re adequately protected. At the same time, others could increase the risk of damage or liability, and adding specific coverage or increasing your liability limits may be necessary.
Learn more about how various home improvements can affect your policy coverage below.
Upgrading Your Roof
Replacing your old roof with a new, sturdier one helps your home qualify for a discount on insurance premiums. That’s because a new roof is less likely to suffer damages during extreme weather conditions, which means a lower risk of people filing claims.
If you currently live in a state prone to hurricanes, wind, or hail, you may be eligible for even more significant discounts if you take extra steps to protect your roof, i.e., installing impact-resistant shingle and using special loss-mitigation measures like hurricane straps and waterproofing.
Upgrading Your Electric or Plumbing Systems
If you’re considering a significant upgrade to your HVAC system, such as new ductwork, inform your home insurance company to qualify for a discount.
However, unless you’re also changing the type of HVAC system (i.e., switching from an oil-forced-air furnace to a gas-forced-air furnace), there is no need to update your dwelling coverage.
Installing a Security System
Discounts for home security systems are common, and the amount can vary depending on your system type. A basic alarm system may qualify for a small discount, while a more sophisticated system that automatically alerts the police will likely earn you a higher discount.
Renovations that increase homeowners insurance rates
Expanding Your Space
When you add extra square footage, you’ll need to increase your coverage to account for the added value of your property. Expanding your space can cause an increase in your premiums, as the insurance company will have to pay out more if there’s a covered loss.
Adding a Swimming pool
Homeowners insurance typically covers damage to swimming pools or hot tubs, provided a covered loss caused the damage and falls under your dwelling, personal property, or other structures coverage.
If you plan to install a new swimming pool, consider raising your home insurance liability limits to at least $300,000 to $500,000 and getting a separate umbrella policy for extra protection.
Upgrading Your Bath or Kitchen
If the kitchen or bathroom renovation involves installing expensive materials, you may need to increase the dwelling coverage on your policy to ensure adequate protection. Otherwise, you may have to pay out-of-pocket damages after a covered loss.
Adding a Home Office
When you add a home office for your business, you may need to increase your insurance coverage to protect the added property and equipment. If you have clients or customers visiting your home office, you may also need liability coverage in case of accidents or injuries.
Discussing these home improvements with your insurance provider to ensure you have the appropriate coverage in place is best.
About Transparity Insurance Services
Transparity Insurance Services was founded for the purpose of helping clients to ensure their property and assets with no hassle. We are committed to providing a simple, easy, efficient, and positive experience to all of our clients, and prioritize open and transparent communication with our clients. Through our excellent customer service and technology, we can help you to find the right insurance program at a competitive price. Contact us today at (855) 889-2037 to learn more about what we can do for you.