Home renovations that can impact your home insurance

Covid has made people spend more time in their homes. As a result, many people have decided to do renovations or change/add to their space.  Planning a home renovation can involve fun activities, such as designing a new floor plan or picking fixtures and paint colors. Discussing your homeowners insurance (while not as fun) should be part of your preparations too.

Renovations that may increase home insurance rates

Some home renovations greatly increase the value of your home and the cost of your home insurance, while others do not have much of an effect. You should know what you can expect if you plan to proceed with one of the more popular home renovations.

Adding an office/space for a home business

Most homeowners policies protect equipment for home-based businesses up to about $2,500. That might not be enough for a business owner who uses specialized machinery or stores large amounts of supplies or inventory. Additionally, homeowners policies might not cover liability related to the business. You may need to update your existing policy or purchase an additional business policy. This is particularly true if your business is the type that creates heavier foot traffic in your home, such as piano lessons or fitness sessions.

Expanding your space

Sometimes a home needs to grow to accommodate an expanding family. That can mean adding more livable square footage, such as in a basement or attic.  You may also need more post-renovation insurance if the added space is not inside your house. Adding a large finished deck could increase the value of your home, for example.

You may need to consider other types of coverage for the newly built areas of your home. A finished basement with new carpet, drywall and insulation may need water backup coverage if the sump pump is located there.

Upgrading your kitchen or bath

Creating a chef’s dream kitchen or a spa-like bathroom are very popular projects and can give your home value a nice boost.  To protect the full value of your home, you will need to update your home insurance after a renovation.

For example, say your insurer based your coverage on a kitchen with laminate countertops and generic cabinets. If you spend $40,000 on granite countertops, custom cabinets and top-of-the-line appliances, your existing coverage may not be sufficient to rebuild your remodeled kitchen after a loss.


Renovations that lower home insurance rates

If you are making changes that make your home safer, like updated electrical or plumbing systems, you could see lower rates after you and your provider evaluate your home renovation insurance needs.

Renovating or replacing your roof

A new roof may not be the most exciting home improvement, but it can save you money when it comes to homeowners insurance.

Some homeowners can get even bigger discounts if they live in wind- or hail-prone states and their new roof has special loss-mitigation measures, such as impact resistant shingles.

Do I need to increase my homeowners insurance after renovating?

Contact your insurance agent when you have done any type of work to your home, so that they can perform a post-renovation review to accurately determine if you policy updates that need to be made.  With all the time, energy and money that goes into home renovations and improvements you want to make sure they are protected!