Home Insurance During Renovations

The first step when doing renovations in your home: Get in touch with your home insurance provider. Below, we’ll run down the basics of what you need to know, but every insurance provider has their own rules regarding renovations, and the only way to avoid an insurance gap is to make sure that you keep them up to date every step of the way.

You Will Want To Up Your Limits

There are a lot of reasons, some obvious and some less-so, that you may want to up your limits when doing renovations, whether or not your insurer requires it. For instance:

  • The big one: Your home is going to be worth more. You want your policy to cover what you have now, not what you had a month ago.
  • Liability concerns multiply on an active construction site. If you have your buddy come over after work to help raise a wall for your new guest room and he injures his hand, you could be looking at everything from medical costs to lost wages. Let your insurer know you may be employing some part-time help (even unpaid, and unofficial), and find out what they recommend.

You will probably want to incrementally increase your limits as you go. A guest room addition may only take a week to construct, but more extensive kitchen remodeling may take months of small improvements. When you install that new sink, put up a new wall or re-tile the floor, get it appraised and covered.

Make Sure Your Contractors Carry Insurance

Technically, anyone can start a private contracting company simply by putting a listing in the local paper. Make sure your contractors are the real deal, and fully insured. If one of their employees is injured, you want to be sure that the costs are covered on workers’ comp, and not on your own liability policy.

Reappraise The Home When Finished

You may have been incrementally increasing your limits along the way, but it’s still a good idea to have someone take a look at the finished product so that you can insure your home for what it’s really worth. A beautifully renovated home is more than just the sum of its parts.

Your home insurance provider will be a big help in guiding you through the process, so stay in touch with them, keep them up to date on how the project’s coming along, and stay covered.

FAQ’s About Home Insurance During Renovations

Will my home insurance policy cover damages during renovations?

Home insurance policies may offer coverage for damages that occur during renovations, but it’s essential to review your policy or speak with your insurance provider. Some policies require a special endorsement or may have limitations on coverage during construction work.

Do I need to notify my insurance company before starting renovations?

Yes, it’s important to inform your insurance company before beginning any renovations. Failure to do so could result in a denial of coverage if an incident occurs, as renovations can change the risk profile of your home.

Can renovations affect my home insurance premiums?

Renovations can potentially affect your home insurance premiums. Improvements that increase your home’s value or safety may lower premiums, while extensive structural changes could result in higher premiums due to increased replacement costs.

What kind of documentation should I provide to my insurer when doing home renovations?

You should provide detailed information about the scope of the renovations, including the types of work being done, the project’s duration, and the qualifications of the contractors. It’s also wise to keep receipts and contracts as part of your documentation.

Are contractors and workers covered by my home insurance policy during renovations?

Typically, contractors and workers should have their own insurance coverage, such as liability insurance and workers’ compensation. Your home insurance policy usually does not cover injuries to workers or damage caused by their work.

What happens if my home is uninhabitable during renovations?

If your home is uninhabitable during renovations, your home insurance policy may provide coverage for additional living expenses (ALE). This helps cover costs like temporary housing and meals, but you should confirm the details with your insurer.

Are there specific types of renovations that my home insurance policy won’t cover?

Most standard home insurance policies cover a wide range of renovations, but there may be exclusions, such as DIY electrical or plumbing work that does not comply with local building codes. Always check with your insurer for any specific exclusions.

How do I ensure my renovation project is properly insured?

To ensure your renovation project is properly insured, update your home insurance policy to reflect the changes being made, consider purchasing a builder’s risk policy for extensive renovations, and verify that your contractors have adequate insurance coverage. Keep open communication with your insurance provider throughout the project to address any changes in coverage needs.

What additional insurance might I need during home renovations?

Depending on the scale of your renovations, you might need additional insurance such as a builder’s risk policy, which covers the property during construction, or a renovation policy that specifically caters to homes under construction or major renovation.

Will installing a new security system during renovations affect my home insurance?

Installing a new security system can affect your home insurance positively by potentially lowering your premiums. Insurance companies often offer discounts for enhanced security measures that reduce the risk of theft and vandalism. Make sure to inform your insurer once the system is installed so they can adjust your policy accordingly.

Impact on home insurance premiums post-renovation

When undertaking a home renovation, we need to be aware that our homeowners insurance coverage and costs can change. Here’s how:

  • Scope of Renovation: Minor updates may not significantly affect premiums, but adding square footage or a major structural change will likely result in a premium increase.
  • Quality of Materials: High-quality materials might increase your home’s replacement value, which could raise your premium.
  • Safety and Risk: Installing a pool or a roof with fire-resistant materials will affect your risk assessment. Pools can increase liability risk, potentially increasing premiums, while using safer materials might qualify us for discounts.
  • Policy Adjustments: We may need to adjust our policy limits to ensure we have adequate coverage for the new value of our home.
  • Discount Opportunities: Some renovations, like updated electrical systems or fortified doors, might reduce our risk profile and qualify us for insurance discounts.

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