If you painted, updated, or replaced the carpet in your home before a covered loss, your homeowners insurance might cover those costs. However, your policy might need to be updated to provide the level of coverage you require if your remodel or renovation includes things like adding a room, upgrading a kitchen or bathroom, or installing a pool.
Before beginning a renovation project, there are a few things to check in your insurance policy if you're looking to renovate or expand your home.
A home's value may rise as a result of improvements, which may have an effect on your dwelling coverage.
It's crucial to assess your coverages and needs in collaboration with your insurance provider or agent.
What Is Covered by Homeowners Insurance?
Your home and your personal property are typically covered by a typical home insurance policy from damage brought on by a variety of unforeseeable events, such as fire, windstorm, hail, or lightning. If your home is damaged or destroyed by a covered cause of loss, your insurance usually includes dwelling coverage to help pay for the repairs or reconstruction.
Numerous policies also cover other buildings on your property that aren't connected to your house, like garages, sheds, and fences. Many policies also include personal liability and loss of use coverage.
What Impact Will a Renovation Have on My Home Insurance Policy?
You should carefully review your home insurance policy to determine what is covered before you begin a renovation. The majority of home insurance policies include some protection in case your house is damaged during renovations, but it's crucial to speak with your insurance agent ahead of time to ensure that you have enough coverage.
Verify that the contractor has the required insurance coverage if you intend to hire one to finish the project. In the event that your home is damaged, this could also include coverage for personal liability, workers' compensation, and property damage. You'll also want to make sure that your liability is covered if you're doing the renovation yourself with assistance from family or friends.
But there's more to think about than just the possibility of damage during a renovation. You should also consider how making improvements or increasing the size of your home might raise its value. This might be advantageous for resale, but you'll need to increase your dwelling coverage in your insurance policy to reflect the increased value of your house.
How Does My Home Insurance Coverage Work?
If your house is damaged by a covered loss, your dwelling coverage will pay to repair or rebuild it. An estimation of the cost to rebuild your home usually determines the amount of dwelling coverage you need. The cost to repair or rebuild your home in the event of a covered loss could be affected by renovations you undertake, such as remodeling your bathroom or upgrading your kitchen.
This means that the improvements you made to your home may not be sufficiently covered by your current home insurance. In order for your home insurance company or agent to recalculate the estimated cost to rebuild your newly renovated home, you'll want to make sure they are aware of the improvements. While the home's current market value might be less than you would like, it might cost more to rebuild. Rebuilding could become more expensive over time than initially anticipated due to economic changes like rising labor or material costs.
What Additional Protection Do I Need?
When planning a home renovation project, you may want to review your liability coverage as well as your home insurance dwelling coverage since you may have increased the number of people on your property. Your general contractor might occasionally use subcontractors for a portion of the work. Make sure to inquire with your contractor about any subcontractors' insurance coverage. You may need to increase your personal property coverage if you're adding new furniture, electronics, or other possessions to your renovated space in order to protect these items.
To obtain more information or a home insurance quote, speak with your neighborhood independent insurance agent.