Spring is here and for many that means home renovations! From adding a pool to remodeling the kitchen, many are looking to refresh and renew their home by doing some updates, but you may want to take a moment to consult your insurance agent.
Homeowners insurance is dependent on factors such as a home’s size, condition, and the cost to rebuild in the event of a loss. What if those factors change? Home renovations such as adding a deck, or a family room addition can alter the amount of coverage you need.
Any significant updates and upgrades could leave you underinsured.
For example, imagine you are finishing your basement into a living space. Finishing a basement can add a lot of value to your home. That added value will need to be reflected in your homeowner’s insurance so that in the event of a loss you will be able to rebuild or replace adequately. Depending on your home and the renovation, you may also want to add coverages such as flood or increase coverages such as personal property if you have purchased new items for the new space.
If you are planning to do any home renovations this spring, here is an easy checklist to help:
- Talk to your insurance agent before starting any renovation
- Let your insurance agent know about your renovation plans and find out how they may change your coverage needs.
- If you are DIY-ing your renovation, think about your liability limits are enough to cover any potential injuries or accidents that may happen if you bring in an unlicensed friend to help you with the project and they are injured.
- You may also want to discuss additional coverage to protect construction materials from damage or theft incurred during renovations.
- Verify that your contractors have insurance
- Ask for a Certificate of Insurance, they should have both commercial business/general liability and workers compensation. Make the same request of any sub-contractors on the job (electrician, plumber, etc.). If a contractor is unable or unwilling to verify their insurance, consider hiring someone else.
- Keep records and receipts
- Take photos before, during, and after your renovations as a visual record of all the work that is being done.
- Keep copies of all contractor contracts and receipts of any work done and materials purchased.
- If you purchase new items as part of the renovation, keep receipts and add that information to your home inventory.
- Update your insurance coverage after the renovation
- Contact your agent to update your homeowner’s insurance policy to reflect the renovation changes. Be prepared to show any records and receipts so they can accurately assess your coverage needs. They may also need to complete a new property inspection.
Home renovations can impact your homeowner’s insurance coverage. Some renovations will change the amount of coverage you need, others could help you qualify for a discount. No matter which type of renovations you make, your existing coverage limits may be too low to match your home’s post-reno value.
