The Impact of Home Renovations on Your Home Insurance Policy

Home renovations can be an exciting way to enhance your living space, increase your property’s value, and improve your overall quality of life. However, it’s crucial to understand how these changes might affect your home insurance policy, as failing to do so could leave you underinsured and facing significant financial risks.

Why Might Renovations Change My Home Insurance Needs?

Renovations can significantly impact your home insurance for several reasons, including the following:

• Increased property value—Major renovations, such as adding a new room, upgrading the kitchen or installing high-end fixtures, can increase the value of your home. This means your current insurance coverage might not be sufficient to cover the cost of rebuilding or repairing your home in case of damage.
• New or enhanced risks—Adding features like a swimming pool, home office or a new roof can introduce new risks. For example, a pool increases the risk of accidents, which might require additional liability coverage.
• Building code updates—Renovations might need to comply with updated building codes, which can be more expensive. Your insurance policy should reflect these potentially increased costs. Ask your insurance broker about building code coverage, which may be able to help.

How Can I Adjust My Policy to Ensure Suitable Coverage?

To ensure your home insurance policy remains adequate after renovations, consider the following steps:

1. Notify your insurer. Inform your insurance company about any renovations. They can reassess your property and adjust your coverage accordingly.
2. Increase coverage limits. If your renovations have increased the value of your home, you may need to increase your dwelling coverage limits to ensure you can rebuild or repair your home to its new standard.
3. Explore endorsements. Consider adding endorsements or riders to your policy for specific upgrades. For example, if you’ve added a home office, you might need additional coverage for business equipment.
4. Review liability coverage. If your renovations include features that increase liability risks, such as a pool, ensure your liability coverage is sufficient to protect you in case of accidents.

Get the Right Coverage

Contact Rich Toreson Insurance Agency Inc in Mount Shasta, CA, today to ensure you have the right coverage for your home.

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.