Protect Your Home Renovations with Home Insurance – A Guide for Homeowners
Are you a homeowner considering giving your favorite room a facelift with a home renovation?
You’re not alone! According to the American Housing Survey conducted by the U.S. Census Bureau, 135 million home improvement projects were completed between 2019-2021.
Picking out your new kitchen sinks and cabinets might be the highlight of any home renovation project. However, you don’t want to overlook some initial steps to protect your home insurance. In April 2022, the Harris Poll revealed that 40% of homeowners failed to update their insurance policies after completing their home renovation.
Before you dive in head first, your priority should be to understand how a renovation project may affect your current insurance. Learn more about protecting your home renovations with home insurance to make an informed decision.
What Does Homeowner Insurance Cover?
It’s no secret that your home policy protects your most significant investment from a potential loss. An unforeseen disaster may require your home to be rebuilt or repaired. If the unexpected happens, your home insurance may cover:
- Rebuild of home
- Replacement of personal belongings
- Other structures, such as garages, sheds, and fences
- Heating and cooling system
- Repairs of electrical systems, A/C, etc
- Living expenses while the home is repaired or rebuilt
A homeowner’s insurance policy usually protects your home in the event of a fire, smoke, vandalism, theft, certain weather conditions, and falling trees. At the same time, a standard home insurance policy typically does not cover a home renovation or remodel.
How Does a Home Renovation Affect My Home Insurance Policy?
If your new kitchen renovation includes granite counters and top-of-the-line kitchen appliances, the cost of replacing these upgrades will typically increase. Your home insurance policy will be affected and must be updated to ensure your dream kitchen is fully insured.
Home renovations and remodels will affect the cost of your homeowner’s insurance. The following renovations will require an increase in price and possibly additional insurance coverage:
- Increasing your home square footage
- New pool
- Kitchen renovation
- Bathroom remodel
- Upgraded flooring
Not all home renovations increase your homeowner insurance premium. You may be surprised to learn that upgrading your heating and cooling system, enhancing your property’s security apparatus and installing fire sprinkler systems are just a few of the improvements that provide insurance premium savings.
Should I Call My Home Insurer Before or After My Home Renovation?
Both! Call your home insurer before your home renovation begins and immediately after completion. Your insurance agent can walk you through your current policy, insurance limits, and the options available to protect your home renovation.
To avoid being underinsured, contact your home insurer for a new replacement value estimate after completing your home renovation. By involving your home insurer at both stages, you safeguard your investment, which allows you to fully enjoy your newly renovated space with peace of mind.
Which Home Renovation Insurance Do I need?
The goal is always to complete a home renovation without a hitch. Unfortunately, mistakes and accidents can happen. Protecting your home and your assets from liability is essential. The following home renovation insurance is recommended.
Dwelling Under Construction Coverage
Often referred to as home under construction insurance, this additional coverage can save you time and frustration if damage or loss occurs. This additional insurance premium can protect your home renovations from burst pipes, fires, and more during construction.
Vacant Home Insurance
If your renovation requires you to move out of your home temporarily, this home insurance coverage will protect your home structure if a loss occurs while you’re gone. A standard home insurance policy does not cover a vacant home. Under your vacant home policy, your insurance agent will advise you on what types of damage are covered.
Builder’s Risk Insurance
Covering the cost of damaged or delayed materials is a lifesaver during a home renovation or remodel. This home insurance addition will replace damaged or stolen materials. This policy offers 12 months of coverage if needed. There is, however, a possibility that the builder’s risk insurance covers your contractor.
What If My Home Renovation Is a DIY Project?
Whether you’re considering a demolition DIY party or tackling your kitchen remodel, you should call your insurance agent first. Involving friends, family, and neighbors in your DIY project may inadvertently expose you to liability and legal disputes.
Increasing your personal liability and medical payment coverage is recommended. You should also check your home insurance policy to ensure you have no-fault medical coverage for additional protection.
Some home insurers only cover the cost of DIY projects with a professional contractor on board. Your home insurer may deny a claim if your DIY remodel caused some damage or immediate repairs.
Should My Contractor Have Insurance?
Yes! As a homeowner taking on an extensive home renovation project, ask your contractor to provide proof of:
- General Liability Insurance
- Workers’ Compensation Insurance
- Property Damage Insurance
It’s a good rule of thumb to check if your contractor’s subcontractors are adequately insured before beginning your home remodel. Valid insurance or not, to avoid unwanted financial burdens, diligently assess your chosen contractor’s referrals. Remember, insurance claims won’t cover flawed workmanship, leaving you to bear the costs.
Home Renovations That Require Permits
Avoiding home renovation headaches is always a good idea. Check with your local building permits and familiarize yourself with the dos and don’ts before you start.
Your new structure or renovation may require a do-over if your home remodels do not meet local codes. A standard home insurance policy does not pay claims for home renovations that did not follow the “ordinance of law” in your local city.
Safeguard Your Renovation Today with the Best Home Insurance
Now that protecting your home is no longer a mystery, let us help you. At InsureOne, we can answer your questions and provide the perfect coverage plan for your home renovation needs. Feel free to get a home insurance quote online or call us at 800-836-2240. You can also come into one of our local offices at your earliest convenience.