Renovating your home is a wise investment as this can update your space and increase the value of your house. Renovations can, however, impact your home insurance as well, so this is something you need to be aware of in advance.
Renovations that will increase home insurance rates:
Swimming pool
The addition of a pool can increase your home’s value, but it can also increase your liability risk, which is why this installation will likely increase your homeowner’s insurance premium. While a standard homeowner’s insurance policy will normally include liability coverage, it is recommended that you opt for higher liability coverage than what is standard for additional protection.
The addition of an office for a home business
Working remotely is very convenient, and adding an office may be ideal if you run your business out of your home. This can, however, increase your homeowner’s insurance rates, so you may have to purchase additional coverage to protect business-related assets and equipment. You can also look into a separate home business policy that would protect you against crime and worker injuries. A reputable broker will discuss your options, including business owner’s policy, in-home business insurance and endorsement of your existing homeowner’s policy.
Expanding your space
Some homeowners will expand their space to accommodate their growing family, which can include modifying the floor plan, adding more livable square footage or finishing a basement. This will make the home a lot more comfortable and enjoyable for you and your family, but you may need to increase your home insurance premium because you will need a higher level of dwelling coverage.
Upgrading your kitchen or bath
This kind of renovation will automatically increase the value of your home. Still, you may have to increase your dwelling coverage on your home insurance so that it’s enough to rebuild your new kitchen or bath with the same newly upgraded materials. This is especially important if you invest in custom cabinets or granite countertops.
Failing to notify the insurance company of these updates could result in a claim not being covered as the initial home has changed from the first risk assessment.
Renovations that will lower home insurance rates:
Replacing your roof
This may not be an exciting project, nor is it cheap, but it can save you money because your home will be better protected with new materials. A newer roof will provide discounts due to a decreased risk.
Electrical, Plumbing, or HVAC updates
Upgrading your wiring or plumbing. You may qualify for a discount when you upgrade your wiring or plumbing systems. This upgrade will lower the risk of fires, electrical, and water damage, so your insurance company will likely provide you with better rates.
The addition of security systems
Installing an alarm system that rings at your home in the event of an intruder will help you save money. Installing an alarm that is monitored and automatically alerts police or a central dispatch team would earn you an even higher discount.
If you’re interested in renovating your home but are unsure how the project will affect your insurance policy, the experts at Leibel Insurance can help. We specialize in home insurance, and our team will provide you with the coverage you need, so contact us today to speak to one of our brokers for more information!