I'm planning a major home renovation and I've got my list of what must have completed: developing a reno plan, interviewing contractors as well as their references and achieving a payment schedule. Those are simply the first three tasks on my list. One item that wasn't on my list up to now was 'tell my house insurance provider that I'm doing renovations'. However my editor asked me to create this piece. To tell the truth, contacting my house insurance provider never crossed my thoughts.
When you do renovations, you're actively altering your home from the way it accustomed to look whenever you bought your policy. And that means its value might be changing too. Let's take a look at just what you need to tell your home insurer – if anything.
How renovations can impact your policy
- Renovations, if done correctly, can boost the value of your house. You will want your insurance policy to reflect that change. That way should something happen, your nice new renos is going to be covered. This includes any new sq footage added because of extensions or additions.
- Preventing your house insurance from being voided. We've discussed what could void your house insurance. If you have to leave your house in excess of 30 days and have to shut off your utilities for the renovations, your house insurance provider may assume you've left your home vacant and void your policy. Letting them know may prevent this from happening because you'll need…
- Liability. Renovations means a construction team caring for your property. If any workplace accidents happen, you may be responsible for those injuries and you want to be covered which means you do not pay up front.
Speaking of liability, one more reason the reason why you may want to call your home insurance carrier is to get extra insurance throughout the renovation period. That's because while your contractor must have insurance, it might only cover their equipment and materials. Check to see if your insurance policy covers your materials and equipment (appliances, etc.) from damage or theft and if it doesn't, consider getting the additional insurance. Builder's risk insurance is targeted at this purpose. It'll cover your home throughout the renovation period and covers theft and damage.
Now the good news about why you need to get in touch with your home insurance carrier: Discounts! Your renovation could pave the best way to a price reduction in your home insurance policy. Here are some renovations that may net you a discount:
- Electricity. Insurance providers prefer to not insure homes which have knob-and-tube wiring, so rewiring your home means getting property insurance.
- Security. Insurance companies offer discounts whenever you add security features to your house to avoid theft. This includes a house alarm, video monitoring and frequently, a third-party security company.
- Sewer upgrades. Aside from not wanting sewage in your nice, newly renovated home, getting a sewer backup added while doing renovations could get a discount. Be sure to ask your insurance provider.
- A new roof. Insurance providers can't stand old roofs because there's a larger chance of leaks -which means water damage, that also means a higher chance of a claim. Getting a new roof could mean a lesser premium.
A renovation is definitely an exciting and stressful time. One thing that will reduce your stress is understanding you're covered in case anything happens. That way, the different options are your time and effort scrolling through bathroom designs on Instagram and deciding between your two-dollar and nine-dollar subway tile. Here is a tip from a designer friend: there is no difference.