Home Renovations That Could Impact Your Insurance Coverage

Home renovations can significantly enhance your living space and increase your property’s value. However, it’s essential to understand how these changes might impact your home insurance coverage.

How Renovations Can Affect Your Home Insurance

The following are some common renovations that could affect your insurance premiums and coverage:

• Adding a swimming pool—Installing a swimming pool can be a fantastic addition to your home, providing an excellent place for relaxation and exercise. However, pools are considered “attractive nuisances” and can increase liability risk. This often leads to higher insurance premiums, and your insurer may require additional safety measures, such as a locking fence.

• Expanding your home’s square footage—Whether you’re adding a new room or extending existing spaces, increasing your home’s square footage raises its replacement value. This means higher rebuilding costs in case of a total loss, which can result in increased insurance premiums.

• Upgrading kitchens and bathrooms—Renovating kitchens and bathrooms with high-end materials and appliances can boost your home’s value. However, these upgrades also increase the cost of repairs or replacements, potentially leading to higher premiums.

• Adding a home office—With the rise of remote work, adding a home office has become popular. While this can increase your home’s value, it may also require additional coverage for business equipment and liability, especially if clients visit your home.

• Installing a new roof—A new roof can improve your home’s energy efficiency and curb appeal. Depending on the materials used, your insurance premiums might be lower due to reduced risk of damage.

• Building a deck or patio—Adding outdoor living spaces like decks or patios can enhance your home’s functionality and value. However, these additions can also increase your liability risk, potentially leading to higher premiums.

Before starting any renovation project, it’s wise to consult with your insurance provider. This can help your policy reflect your home’s new value and risk profile to avoid being underinsured and facing unexpected costs.

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This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.