Insurance Needs for Home Additions and Renovations

Adding on to your home, completing major or minor renovations, or making upgrades to outdated plumbing or electrical systems can all have a positive impact on the value of a property. But did you know they can also change your insurance needs? Here’s what you should do to make sure you’re covered before, during and after you make changes to your home.

Update your homeowner’s policy, right away:

Your homeowner’s insurance was intended to cover the property as it was when you purchased the policy. So it’s important to let your insurance company know about any renovations or upgrades as soon as possible. In addition, you should let your insurance company know about your remodeling plans before you get started, to be certain you’ll be covered during the process.

Renovate and save:

A major addition to your home may increase your premium, but certain upgrades might actually get you a discount. Insurance needs for home will not necessarily change with all improvements.  Replacing a worn out roof, upgrading outdated wiring or plumbing could get you a reduced premium. If you live in an area that’s prone to hurricanes or flooding, consider renovating to make your home more weather-proof. Finally, adding security features to your home may result in a reduced premium from some companies.

Vet all contractors and subcontractors:

We always hear that it’s important to hire an insured contractor, but why? Well, first of all, many states require contractors to show proof of insurance in order to gain licensure, so you’ll know that your contractor has the minimum skill requirements. But more importantly, a contractor’s insurance may cover mistakes or injuries that would not otherwise be covered by your homeowner’s insurance. So make sure the liability isn’t all on you by hiring a licensed and insured contractor in the first place. And don’t just take your contractor’s word for it–make sure to examine documents and be sure the insurance policy will last for the duration of the project, even if that means calling the company yourself.

Choose a bonded contractor for extra protection:

Insurance needs for home when remodeling may include bonds.  A bond is a type of insurance that protects the customer in the event that a project is done poorly or not completed. If your project is high risk or if you are unfamiliar with your contractor, consider requiring them to purchase a surety bond.

Consider extended liability coverage:

If anyone other than licensed contractors and subcontractors will be helping with your renovation–friends or family members, for example–you may want to increase your liability coverage while the work is being done. This will protect you if an uninsured individual is injured on the job.

Secure your personal property:

If the renovations on your home include additional items, like a sound system, outdoor equipment or expensive fixtures, you may want to add separate coverage for these items and/or list them separately on your policy. Either way, be sure to alert your insurance agent of your new property so that it will be protected in case of theft or damage.