Most homeowners dislike moving into a house someone else has designed and built without making a few changes. Changes that will better match the house to the new occupants because, let’s face it, not all people have the same tastes or exact needs.
You will often not even think about checking with your home insurance policy to see if the changes will be covered during and after the project. Unfortunately, there are a couple of things you need to keep in mind when making any changes to your home, no matter how big or small.
Cost Of The Home Insurance Premiums
The first thing you will notice when you talk to the insurance carrier will be the increase in insurance premiums that will need to be covered. If you think about it, when you renovate your home the property’s value will go up. What this means for the insurance company is an increase in the amount of money they would have to pay if a claim was filed.
You may not think a change could make that big of a difference; in some instances, you may be correct. However, if you make any significant changes to the house or renovate any of the following areas, you need to stay in touch with your agent until the project is completed. A new value for your home can then be set.
- Kitchen
- Bathroom
- Heating or cooling systems
- Pool installations
- Flooring
- Roofing
- Added footage
These areas within the home can create some damage if not done correctly, which will also bring up an instance where the home insurance premiums will go up. It is important to ensure that any contractor you use has their own insurance to cover faulty work. Still, it is always better to inform your insurance carrier before the task starts so they can adjust the house and contents insurance rates accordingly, just in case you ever have to file a claim.
Coverage During The Renovation
Another aspect of your homeowner’s insurance that will be affected if something bad happens is the policy during the renovation. If the policy in place does not cover the safety aspects of the job, you can always get a supplemental policy that will. This is always a good idea because even though your contractor will have their own insurance coverage, there is no telling if an accident or mishap may cost more than what they are covered for. Always play things on the safe side rather than hoping everything will work out perfectly.
The insurance plan throughout the task will need to cover the area of the house being worked on, as well as any damages that may occur due to the changes being done. That is not all, though. You may want to seriously think about increasing your liability coverage. If any serious accidents should occur, the contractor, one of their workers, or even the building inspector may attempt to collect monetary damages from you and your insurance carrier.
That is another reason why you want to stay in touch with your agent. If an accident does happen and a claim is filed, there is a chance that it will be denied because they were not aware of the renovations. And the extra amounts of liability that they could be responsible for due to the excessive amounts of people that will be on the premises.
Final Thoughts
The main thing to remember when you are curious about the effects a renovation will have on your home insurance is that it is better to be safe than sorry. So what if you have to pay a little extra during the job, as long as it will keep you from having to pay for any claims out of your own pocket.
Once the task is done, it will also not be a big deal to have an increase in your yearly premiums. After all, your house value went up, so you will want the entire house to be covered if a claim must be made, without the carrier excluding the newly renovated room simply because it was not reported to them.
