How Your Insurance Can Change After a Home Renovation

1. Increased Property Value
   One of the most noticeable changes during a home renovation is the increase in your property's value. Whether adding a new room, upgrading appliances, or installing high-quality materials, your home's value will likely rise significantly. It's crucial to inform your insurance provider of these changes to ensure that your policy reflects the updated value of your property. Failing to do so could leave you underinsured in a disaster, such as a fire or natural calamity.
2. Liability Risks
   Home renovations can introduce new liability risks. Contractors and subcontractors working on your property can get injured, and their injuries could result in costly lawsuits. To mitigate this risk, you should consider adding a builder's risk insurance policy during the renovation project. Once the renovation is complete, review your liability coverage to ensure it protects you against potential accidents and injuries on your property.
3. Changes in Coverage Requirements
   Certain types of home renovations may trigger changes in your insurance coverage requirements. For example, if you build an addition to your home, you might need to increase your dwelling coverage to cover the additional square footage adequately. Similarly, if you install high-end appliances or fixtures, you may need to adjust your personal property coverage to protect these valuable items adequately. Consult your insurance provider to understand how your renovation project affects your coverage needs.
4. Safety Improvements
   Some home renovations, such as upgrading your electrical system or installing a new security system, can lead to discounts on your insurance premiums. These safety improvements can reduce the risk of accidents and break-ins, making your home safer. Be sure to inform your insurance company of any safety enhancements to take advantage of potential premium reductions.
5. Temporary Housing Coverage
   During extensive renovations, you may need to vacate your home temporarily. If this is true, you should discuss with your insurance provider whether your homeowner's insurance includes coverage for additional living expenses. This coverage can help cover the costs of temporary housing, meals, and other essential expenses while your home is being renovated.
6. Documentation and Record-Keeping
   Throughout the renovation process, detailed records, including contracts, invoices, and photographs of the work, are essential. These documents can be invaluable if you ever need to file a claim related to the renovation. They can help establish the value of the improvements and demonstrate that the work was done to code and completed by reputable contractors.