Planning a home renovation can be exciting. Whether adding a new room, updating the kitchen, or building a backyard deck, these upgrades can increase comfort and value. However, many homeowners are surprised to learn that specific changes affect their insurance coverage.
If you're investing in any significant updates, it's essential to understand how they could impact your policy. This is especially true if you're looking for accurate protection and affordable coverage long after the work is complete.
Here is how home renovations impact homeowners insurance and why keeping your insurer informed is a smart move.
- Your Home Value May Go Up
When you upgrade or add to your home, its overall value usually increases. Projects like finishing a basement, remodeling a kitchen, or adding a second story can significantly raise your home's rebuild cost, which is the amount your insurance company would need to cover if your home were damaged or destroyed.
If your policy is based on the value of your old home, you might not be fully covered after renovations. A quick review of your policy can help ensure it still matches your home's current condition.
- More Features Could Mean More Risk
Some renovations improve how you use your space but also add new risks. Installing a swimming pool, for example, can increase the chance of injury on your property. Building a wood-burning fireplace or outdoor kitchen might also raise fire-related risks.
These upgrades may lead to higher liability coverage needs or changes in your premium. Informing your insurance provider ensures that these features are included in your policy and that any risks are handled correctly.
- Contractors and Construction Work
Whenever you hire a contractor to work on your property, something could go wrong during the project. If the contractor is not adequately insured or licensed, damage or injury on the job site could lead to problems for you.
Your insurer may require proof of coverage from the contractor or suggest adjusting your policy for the length of the renovation. Keeping everyone protected during construction is just as important as the finished result.
- Energy Upgrades and Insurance Savings
Some home renovations improve energy efficiency, such as replacing your roof, updating old wiring, or installing storm-resistant windows. These updates can make your home safer and lower the risk of certain types of damage.
Sometimes, these improvements may lead to savings on your insurance costs. It is worth discussing these upgrades with your insurance provider so you know what benefits may apply.
Keep Your Coverage in Step with Tompkins Insurance
At Tompkins Insurance, we help homeowners understand how changes to their homes affect their policies. While the impact of home renovations on homeowners insurance is often overlooked, it plays a key role in ensuring protection.
If you've made recent improvements or plan to, contact us 24/7 at 1-888-261-2688 in New York or 1-888-601-2611 in Pennsylvania. We can review your current policy and help you update it to reflect the value and features of your newly improved home.
Read more: Top Mistakes to Avoid When Filing a Homeowners Insurance Claim
