5 Renovations That Can Impact Your Home Insurance

You already know that renovating your home is a great way to increase its value and entice potential buyers.

However, one thing you might not have considered is how it will affect your insurance. 

Purchasing home insurance is essential if you own a home, whether it’s 100 years old or brand new. 

How do renovations impact your insurance? Well, insurance is meant to help you rebuild or repair your home in the event of a fire, flood, or other damage. If your home increases in value, that means it will cost more to rebuild it.

But that doesn’t mean all renovations increase your insurance costs. A select few can actually reduce it. 

You don’t want to be underinsured when disaster strikes. If you’re planning to start any of the following renovations, keep in mind that they will have an impact on your home insurance:

Additions

Your house is perfect just the way it is, except for one thing: you’re running out of room!

Maybe you’ve got a baby on the way or you’re looking for more space to dedicate to a hobby. Either way, you’ve decided that you need an addition. 

If you increase your home’s square footage, it will require more coverage. It’s part of a majority of insurance policies. Even a deck falls under this category. 

Contact your insurance provider to let them know that you’ve recently expanded the space in your home. They’ll tell you how much you’ll need to pay for comprehensive coverage.

Are you thinking of adding a home office to your abode? Along with the coverage you’ll require for the extra square footage, you’ll also need to cover your business assets. If you require special appliances or equipment for your home-based business, your standard home insurance may not cover it. 

Costs will increase further if you have customers in your home, like if you offer haircuts or music lessons. Call your insurance company and ask about in-home business insurance. 

Pools

When summer starts, you look around your backyard and realize that it’s missing something: a beautiful, blue, swimming pool. You can already feel the cool water on your toes.

But before you get this project underway, consider if you can afford the cost of increased insurance. A pool makes accidents more likely, which you may be liable for (even if it isn’t your fault). If someone decides to sue you for an accident that took place at your pool, you’ll want to have insurance for legal fees.

Try to install additional safety measures to reduce the chances of accidents, like a pool cover or fence. Even though it’s fun to use, a diving board drives up insurance costs substantially. 

Like most renovations mentioned here, a new pool will also increase the value of your home. That should be accounted for in your coverage.

The cost of building and maintaining a pool can be extensive. Before you take the plunge on that investment, make sure you can cover the insurance increases, too.

A new roof

If your current roof is older than 20 years, most insurance providers will be reluctant to cover it; it has become a problem waiting to happen.

In 2021, you’ve got a fresh idea: new year, new home, new roof!

Unlike the renovations we’ve mentioned so far, this one can save you money on insurance. Why? Because it can help protect your home against leaks, weather damage, and heating/cooling losses. A well-insulated and fortified roof is something that insurance providers take note of.

That being said, a new roof will also increase the value of your property. Depending on your insurance company, you may require additional coverage regardless.

To see if your renovation will qualify you for a discount, contact your insurance provider.

Kitchen & bathroom renovations

When it’s time to remodel, most homeowners start in these rooms since they’re used every day. Your kitchen is the hot spot for cooking, cleaning dishes, and fixing a late-night snack. And bathrooms get a lot of foot traffic. 

You’ve got big plans for these rooms: white marble countertops, glossy, heated, floor tiles, and maybe even a bidet. It’s well-known that these renovations have a high ROI—up to 59%!

Designer materials and fixtures can improve the functionality and appearance of these rooms. But they’ll also cost more to insure—think about how much more expensive it will be to replace a granite countertop than a laminate one.

Here’s the caveat: certain upgrades (like plumbing improvements) reduce the chances of a leak, which can thereby lower your insurance costs. The same principle applies to wiring upgrades, which can prevent electrical fires. To be deemed eligible for this type of discount, your home may need to be inspected by a professional. Replacing lead pipes or knob and tube wiring is a great way to upgrade your kitchen/bathroom and bring down your insurance costs.

When you’re budgeting for your next renovation, consider how it might affect the cost of your home insurance. 

Heating upgrades

Homeowners decide to upgrade their HVAC systems for a few reasons. Maybe the old unit can’t keep up with the temperatures, or they’re tired of paying more for an inefficient system. 

What kind of system is used to heat your home? The answer will determine how much you’ll pay for coverage.

Some units carry more risk than others. A furnace that uses oil or wood can increase the chances of a fire hazard occurring. Switch to one that uses natural gas or geothermal, which will cost less to insure.

Make sure that any work in your home is done by a licensed, certified, and insured technician. Apply for any necessary permits. If you do the work yourself or hire someone without the proper qualifications, your insurance provider may be unwilling to offer coverage.

Before you decide to renovate your home, be sure to budget for potential insurance increases. Or if it was recently renovated, contact your insurance provider and see if you require more coverage. 

Looking for the right general contractors for your home improvement project? What  about the perfect remodeling crew? Contact us at Billy today, and we’ll help you find highly skilled contractors for your upcoming renovation.

About Author 

Kiara provides comprehensive marketing solutions for busy entrepreneurs. She is always open to sharing her experience and giving advice to local businesses by uncovering all the engaging content that converts viewers into customers.