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The Role of Homeowners Insurance for Home Renovations

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If you plan to remodel your home, reviewing your policy and checking with your homeowners insurance agent before the project begins is a good idea. Your homeowners insurance may provide coverage for some renovations. You may want to increase your policy limits and add additional liability coverage in case an accident occurs during remodeling.

What Does Homeowners Insurance Cover With Renovations?

Most standard homeowners policies cover renovations, but it is important to notify your insurer before you begin. Improvements could change the value of your property, and your policy’s coverage limits may need to be adjusted. Certain home renovations may affect the cost of your insurance. For example, upgrading to a metal roof could mean higher replacement costs and increased premiums.

If renovations involve property that has been damaged by a covered peril, your homeowners insurance may pay to replace it, for example:

  • HVAC system damaged by fire or a falling tree
  • Air conditioner damaged or destroyed by fire or hail
  • Deck if damaged by a covered peril
  • Landscaping, including replacing plants and shrubs or removing damaged trees, if caused by a covered peril
  • Roof replacement if damaged by a covered loss: (A new roof could actually lower your premiums as it better protects your home against inclement weather and reduces the chances of water leaks.)
  • Secondary structures such as a detached garage or a shed, if damaged by a storm or other covered peril
  • Swimming pool or hot tub if a covered loss caused the damage

What Policy Changes Should You Make Before Renovations?

Before construction begins, meet with our friendly agent to determine if your existing homeowners policy should be updated. Depending on the specific renovations, you may need to:

  • Increase the amount of insurance you have: Upgrades that increase the value of your home may increase the amount of homeowners insurance you need to carry.
  • Add vacant home insurance: If you plan to live elsewhere while your home is under construction, you may want to add this coverage.
  • Add dwelling under renovation coverage: This insurance protects building materials at or on the way to your property in case they are damaged or stolen. It also provides protection against a foundation collapse.
  • Increase your liability coverage limits during the renovation project: This protects you in case someone who does not live in your home is injured during the renovation project.
  • Increase your liability coverage after the renovations: This may be important if your renovations involve adding a swimming pool or a hot tub, both of which are considered “attractive nuisances.”

Will My Insurance Premiums Increase If I Remodel My Home?

Renovations could increase the value of your home, which may lead to higher premiums. For example, building an addition, such as a family room or a bedroom, will increase your living space and add square footage, which could bump up the costs of rebuilding. Installing high-end materials, such as marble counters or commercial-grade kitchen appliances, could also increase your home’s value and your homeowners insurance premiums.