Home renovations can increase the value of your home. When you undertake a home renovation, you’ll research, create plans and a budget, and consult with experts in the industry. But, often people forget to contact us to update their policies, which can add up to serious risk. While some changes may not affect your homeowners policy dramatically, here are a few that you’ll want to be sure to let your insurance company know about.
Addition to Your Home
If you’re planning on expanding your space to accommodate a growing family or maybe you just want a little more square footage, there are important insurance considerations.
- Are you increasing the square footage of your home?
- Is your addition a finished basement that could require additional flood endorsements?
- Is your addition part of the home structure? Or is the addition a mother in-law suite or workshop that is not connected to the home?
- Are you adding large, finished decking?
Pool
Building a pool for your home increases the value of your home for potential buyers, but also poses a liability risk. If you’re adding a pool to your property, you’ll want to consider increasing your liability insurance or adding an umbrella policy to provide additional coverage. There are also additional safety features that your insurance company may require like a locking gate around the pool.
Home Office
Working from home is the new normal for many people. You might want a dedicated home office space. If you have valuable work equipment, you may also need additional protections. Another consideration is whether people visit your home office. If so, you may want to consider additional liability protections for your business.
New Roof
While many home additions may present a greater cost with regard to your insurance policy, replacing your roof may actually save you money. Replacing items like your roof or HVAC system means your structure is better protected, and may result in a decreased premium.
If you’re considering an update to your home and want a better understanding of the impacts to your insurance policy, give us a call.
Insurance Considerations when Remodeling Your Home
Many homeowners insurance policies include a dwelling replacement extension that provides additional coverage if the cost to rebuild your home exceeds your dwelling coverage limit. The extension could be 25%, 50%, or more. Policy language in these extensions requires you to notify the insurance company if the improvement increases the replacement cost by more than 5%. This means that in order for these extensions to be effective at the time of loss, you must update the insurance company with regard to home renovations.
Some policies offer discounts if you install a new roof, upgrade electrical service, replace older plumbing or install a new furnace. Your project may earn you some of these discounts.
Tips for Protecting Your Home
- Make an insurance review an essential part of any home remodeling plan. Contact your agent before you begin any work.
- Request a copy of the contractor’s certificate of insurance from his/ her insurance agent, including certificates from any subcontractors used by your contractor, and share them with your agent for his/her insight specific to your home to determine any exposure.
- Always check with the Better Business Bureau when selecting a contractor and follow up with references provided by the contractor.
- Inquire if the contractor is registered as required by the Pennsylvania Attorney General.
Always establish responsibility for uninstalled appliances, cabinets, carpet and other items in advance; the contractor should have a builder’s risk policy or installation floater to cover these items.
If you plan to leave your home during remodeling, you could be jeopardizing your homeowners insurance if you are gone for more than 30 days. Most policies have vacancy clauses that vary from company to company, so be sure to check your policy. You can purchase a vacancy endorsement, if needed.
There are many insurance considerations to make before undertaking a renovation project. You don’t have to try to figure it out alone. We can help give you a better understanding of the impacts to your insurance policy.
Updated August 29, 2024
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