Blog

20 2021

Thinking of Renovating? Here’s How it Could Impact Home insurance

by admin

Renovations are a great way to update the look and function of your home while adding equity to the value of your property – provided you’ve renovated the right way.

Before you start a home renovation, it is important to consider how your choices will impact the value of your home and your home insurance coverage.

Bring in Licensed Contractors for Big Jobs

Inspired by the dozens of blogs and series showcasing do-it-yourself remodeling, DIY home renovations are becoming an increasingly popular option for homeowners looking to improve their homes on a budget.

When it comes to impacting the value of your home and potential insurance liability, you want to be very careful when choosing to go the DIY route. Despite what you may see on TV, hanging cabinets, laying flooring, and intricate tiling work is much more difficult than they appear. Before you embark on a large DIY renovation, assess your skills and be honest about your ability to do the job. Poorly done renovations can actually reduce the value of your home, and sometimes it pays to bring in professional contractors.

Also Read: Choosing the Right Home Insurance Provider in Vancouver

From an insurance perspective, your agent probably doesn’t mind if you’ve painted the interior of your home yourself. But it could be an issue if you’ve attempted to remove walls, do any plumbing, ventilation work, or electrical without a licensed professional. Any change to the structure or guts of your home needs to be completed by licensed contractors; as a good rule of thumb, if it happens inside a wall, call a pro. By not using professionals, you could be opening yourself up to having any future claims denied, should your plumbing leak or incorrectly completed electrical work cause a fire.

Some Renovations Require an Increase in Your Home Insurance Coverage

Many homeowners are surprised to find out that their existing home insurance policies may not be enough to cover extensive home improvements. But remember, when a policy is taken out, the coverage reflects the replacement cost of your home at that time. If you’ve spent tens of thousands of dollars on new a new kitchen or bathrooms, your existing coverage may no longer be enough. If you’ve been saving up for years for a $60 thousand dollar dream kitchen, make sure your home insurance policy is updated to reflect the upgrades you have made.

Other renovations could impact your home insurance as well.

Adding an extension to your home, inside or out, adds square footage to your home and requires an update to your home insurance policy.

Pools are a great way to enjoy more time outside and keep cool in the summer, but in terms of your home insurance policy, they are a potential liability that requires additional coverage.

Not All Renovations Will Increase your Home Insurance Premiums

Here’s some good news. Not all reno projects will lead to an increase in your home insurance costs; some might actually reduce your premiums.

Replacing your roof, updating your electrical, replacing older plumbing, or adding a security system can all decrease your insurance rates, particularly in older homes. From an insurance perspective, while these renovations add value to your home, they also make it safer and reduce the likelihood of future claims, which will reduce your annual home insurance premiums.

For most people, large-scale home renovations are the product of years of planning and saving. Make sure you protect that investment by updating your home insurance policy.