Spring and summer are prime time for home improvement projects. When you are picking out new flooring and appliances, your homeowners insurance policy might not be top of mind, but if you are improving or adding more square footage to your home, your homeowners policy likely will need to be updated too. There’s also the question of who is doing the renovation work. From licensed contractors to DIY projects, you should take the time to review your policy to understand what is covered while the work is being done.
Will your home improvement projects increase your homeowners insurance premium?
While it’s easy to understand how a renovation might increase your premiums — after all, you’re adding value to your home — some home improvements can lower your homeowners insurance premium. A new roof potentially could lower your premium, especially if you choose to upgrade your roof with weatherproofing or hurricane straps. Expanding square footage or upgrading a kitchen will likely increase your premium.
What to do before a project begins, contacting your insurance company
If you are planning a major home renovation project, review your homeowners policy with an eye on how coverage will affect the particulars of your project. If you’ve decided to store furniture off-site in a rental storage unit during the duration of a renovation, make sure your policy covers that scenario — you might need to add coverage for items stored off-site.
It sounds strange to pay to cover a new room before it has been completed, but take the time to explain to your carrier what the project entails. If you don’t increase your coverage and something happens to your home during construction, such as storm damage or a fire, damage to any work underway might not be covered.
Make sure your contractor meets any requirements set out by your homeowners policy. Your carrier might require all work on the structure of your home — including electrical work and plumbing — be done by licensed, bonded and insured contractors. And, DIY’ers definitely need to call their carrier: some homeowners policies are voided if work isn’t done correctly.
Confirm your contract carriers insurance
Construction projects can be messy and dangerous. Make sure that your contractors have insurance, and that any subcontractors they might bring on to the job are also insured. You should also check with your local code enforcement authority to see who is responsible for scheduling inspections. Work that is not done to code might void your homeowners policy.
Updating your homeowners insurance policy
Take pictures of the work that was done, and make certain your homeowners policy reflects the improvements or upgrades. A beautifully renovated and upgraded kitchen increases your home’s value — but if your policy isn’t updated, in the event of a loss your insurer is only responsible for the value of the old kitchen.
Policy coverage and restrictions can vary from one state to another, and from one carrier to another, so before you undertake any home renovation projects, call your agent — and take a few minutes to see what other homeowners have to say about their insurance companies.
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