Do Renovations Affect Your Homeowners Insurance Rates?

Worker doing renovations to his home by installing vinyl flooringWhether you’re remodeling your bathroom or building a back porch, renovations are a great way to raise your home’s value. However, since you’re increasing the home’s market value, it’s always a good idea to reevaluate your homeowner’s insurance to ensure you are properly covered at the best rates. Moreover, while some renovations increase your rates, others may grant you discounts and savings on homeowners insurance. Read on to discover the types of renovations that affect your homeowners insurance rates and what additional policies can protect you during construction.

Renovations that Increase Your Rates

While remodeling your home will increase your level of comfort and satisfaction, there are a few projects in particular that will raise the amount of homeowners insurance coverage you need to safeguard your investment and avoid underinsuring your home.

  • Installing a pool: While a pool is a great way to cool down, the liability concerns of a pool cause your insurance rates to go up.
  • Building an addition: Expanding your living space increases your home’s market value and square footage, making it vital you speak to an agent about increasing your coverage.
  • Remodeling current living spaces: Updating your bathroom and installing hardwood floors may call for insurance adjustments to handle the increase in market value.
  • Converting storage areas to living spaces: If you remodel your garage or attic into a livable space, check your policy to ensure these spaces are currently covered by insurance.

Renovations that Lower Your Rates

Due to their purpose of safety, some investments can actually lower the cost of homeowners insurance. Improvements to your home that can potentially lead to savings in the long run include:

  • Upgrading your plumbing or electrical system: Replacing your outdated plumbing or electrical system can lower your risk of water or fire damage, lowering homeowners insurance costs.
  • Replacing your roof: By replacing your roof, you can diminish your risk of snow, hail, and wind damage, which can, in turn, reduce your insurance rates.
  • Building a fence: Building or installing a fence around your pool, backyard, or any hazardous landscape can qualify you for a safety discount.
  • Installing safety features: You can decrease your insurance rates by installing a pool alarm, smoke and gas detectors, a security system, and shatter-proof windows.

Inform Your Insurance of the Renovations

Before you begin renovations, it’s important you reach out to your agent to discuss what is covered under your homeowners insurance. A standard homeowners policy may not cover your building materials, so you can discuss with your agent the need for renovation or builders risk insurance policies. If you have a friend or contractor renovating your home, you may also need extra liability insurance, as the construction will increase the risk of harm. Even if it is only you who is undertaking the task, you may need builders insurance, as you’re likely not covered from harm under your homeowners policy.

Renovations are essential to helping you feel more at home in your home. Nevertheless, it’s important to realize the ways renovations affect your homeowners insurance rates and the potential need for additional coverage during construction. TJ Woods Insurance prides itself on its ability to pair its clients with the perfect policy to ensure they, their family, and their property are protected from disaster. Contact us to discuss the details of your homeowners insurance and discover if you would benefit from additional policies.