Whether you’re adding more living space, remodeling your kitchen, or upgrading your outdoor areas, home renovations can significantly enhance your home’s value and functionality. However, in the midst of planning, securing permits, and choosing finishes, it’s important to consider how these changes might impact your homeowners insurance policy. Keeping your insurance agent updated on your renovations ensures your coverage remains current.
Here’s why informing your insurance agent of improvements is an important step in your renovation process:
Renovations Can Increase Your Home’s Value
Renovations often increase the value of your property. For example, adding a bathroom or updating a kitchen can significantly raise your home’s market value. If your current insurance policy doesn’t account for these improvements, you may not have enough coverage to rebuild your home to its new value after a covered loss. For instance, if your newly remodeled kitchen were to be damaged in a fire and your policy wasn’t updated, you could be left underinsured and unable to fully restore the space to its new standard.
Inform your insurance agent about your renovation plans so they can reassess your coverage to ensure it reflects your home’s updated value. This will help you avoid out-of-pocket expenses if something happens and will ensure that your home is properly protected at its true value.
Renovations Can Decrease Risks
Home improvements are often made with safety and functionality in mind. Adding smoke detectors, alarm systems, or upgrading your roof can significantly reduce the likelihood of damage to your property. Replacing outdated electrical and plumbing systems can also enhance your home’s safety and prevent common issues like fire hazards or water damage.
These improvements can lower the risk of costly damage and, in some cases, may even result in reduced insurance premiums. For example, a new roof may be less prone to leaks, and upgraded plumbing systems could prevent water damage. Some insurance companies also offer home security system discounts for professionally monitored systems. Be sure to notify your insurance agent about these upgrades so they can reassess your risk profile and determine if you qualify for any discounts on your policy.
Renovations Can Increase Risks
Certain renovations can introduce new risks to your property. For example, adding a swimming pool can increase your home’s enjoyment but also raises liability risks. Homeowners may be at greater risk for accidents or injuries around the pool, which can result in costly medical bills or lawsuits.
Other renovations, such as adding a deck or installing a hot tub, may also increase your liability exposure. These changes may require you to adjust your liability coverage to adequately protect you in case of an accident or injury on your property. If your policy isn’t updated, you could find yourself financially exposed.
It’s important to work closely with your insurance agent to review your policy’s liability coverage, ensuring it’s in line with your new property features. This will help you avoid gaps in coverage and protect you from potential lawsuits or claims.
Temporary Risks During Renovation
During the renovation process, your home may be exposed to additional risks, especially if the work is being done while you still live in the home. For example, construction materials may be stored on your property, or areas of your home may be exposed to the elements. Accidents may also happen during the renovation process itself, potentially leading to damage or loss.
Ensure your contractor has appropriate liability insurance and workers’ compensation coverage and talk to your insurance agent about if any additional coverage is needed during the renovation process.
Keep Your Insurance Agent Informed Throughout the Process
Renovations are a significant investment, and protecting your home with the right insurance coverage is a crucial step. Your insurance agent can work with you to make sure your policy accurately reflects the value of your property, the new risks involved, and any potential cost savings that could apply.
By staying proactive about updating your coverage, you can enjoy your renovated home with peace of mind, knowing you’re covered against unexpected events. If you’re planning a renovation or have recently completed one, reach out to your local Farm Bureau Insurance agent to ensure your coverage meets your needs.
Disclaimer: The information included here is designed for informational purposes only. It is not legal, tax, financial or any other sort of advice, nor is it a substitute for such advice. The information may not apply to your specific situation. We have tried to make sure the information is accurate, but it could be outdated or even inaccurate in parts.
