The Impact of Home Renovations on Your Insurance Policy

Home renovations can significantly enhance your property’s comfort, functionality and value. However, these improvements can also impact your home insurance policy. Understanding these effects is crucial to ensure you maintain adequate coverage and avoid unexpected costs.

Increased Home Value and Coverage Needs

One of the primary impacts of home renovations is the potential increase in your home’s value. Upgrades such as a new kitchen, upgraded bathroom or addition can substantially raise the market value of your property. Consequently, your current insurance policy may no longer provide sufficient coverage. It’s essential to inform your insurance provider about these changes to adjust your coverage limits accordingly. This can ensure that in the event of damage or loss, your policy will cover the full value of your newly renovated home.

Higher Premiums

With increased coverage needs often come higher premiums. Insurance companies calculate premiums based on the risk and value of the insured property. Enhanced features like high-end appliances, custom finishes or expanded living spaces can lead to higher replacement costs, which can raise your insurance premiums. While this might seem like an added expense, it is a necessary adjustment to protect your investment.

Potential Discounts

On the flip side, certain renovations can lead to discounts on your insurance premiums. Upgrades that improve the safety and security of your home, such as installing a new roof, modern electrical systems or advanced security systems, can reduce the risk of damage or theft. Many insurance companies offer discounts for these types of improvements, which can help offset the cost of increased premiums.

Temporary Coverage Options During Renovations

During the renovation process, your home might be exposed to additional risks, such as theft of building materials or accidental damage. It’s advisable to talk to your insurance agent about temporary coverage options, such as builders risk insurance, to protect your property during this period. Some insurers offer policies or endorsements covering the unique risks associated with home renovations.

Get the Right Coverage

Contact Harlan Insurance today to learn more and ensure you have the right coverage for your home during and after renovations.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.