How Home Renovations Can Affect Your Homeowners Insurance Policy

Do You Need to Tell Your Homeowners Insurance About Home Renovations?

When taking on new home renovations, your homeowners insurance policy might not be the first thing on your mind. However, for many home renovation projects, you will need to inform your insurance agent. Whether it’s a big project involving reconstruction of part of your home, or a small project that will increase the value of your home or personal property, your renovation will affect your homeowners insurance.

In order to make sure you have the right continuous coverage, always consult your insurance agent! Let’s take a look at some of the most common ways that home renovations will impact your insurance policy.

Unreported Renovations Can Cause a Lapse in Coverage

For significant home renovations, your insurance carrier may require you to notify them about the project up to 30 days before construction starts. If you have to file a claim during the renovation, but you failed to report the project to your insurance in advance, it can be costly. Some carriers impose a 5% construction deductible, which means extra money out of your pocket for something that would’ve been covered with advance notice. On top of that, you run the risk of having a lapse in your home insurance coverage, as some renovations call for a different insurance policy entirely.

Do You Need a Different Insurance Policy During Home Renovations?

Depending on the extent of your home renovation, yes, you may need a separate insurance policy while the project is underway. Here are some common renovations that call for a second look at the gaps in your standard home insurance policy:

• DIY: If you choose to take on a home renovation yourself, you will be fully responsible for any accidents and injuries throughout the project. That includes house guests or friends lending a hand with the renovation. Contact your insurance agent to review your medical payments and liability coverage limits before you get started.
• Temporary vacancy: Big renovations can make your home temporarily uninhabitable. In that case, your insurance carrier may consider it vacant, which means you won’t be protected from damage caused by intruders. Ask your insurance agent if you will need an unoccupied policy to protect your home and belongings during your renovation. You may also save money by pausing your standard policy until your home is habitable again.
• Under construction: Insurance carriers have different definitions of what “under construction” would look like for your home. If that’s what your home renovation calls for, a standard policy won’t cut it. However, your insurance carrier may offer an endorsement, such as a builders risk policy, to bridge the gap in your coverage. Consult with your insurance agent to avoid a lapse in your home insurance.

>> RELATED READING: What Are Homeowners Endorsements?

New Home Value? New Coverage Limits!

If your renovation increases your home value, you will need to update your home insurance to match! This will most likely impact the following coverages on your policy:

• Coverage A (Dwelling Coverage): This is based on the cost to rebuild your home in a worst-case-scenario. If your renovation increases that cost, you will need more dwelling coverage in your home insurance policy.
• Coverage C (Personal Property): Your personal property coverage will cover the actual cash value or the replacement cost of your belongings. If your renovation has increased the current value or the current cost to replace your items, you will need more personal property coverage.

Let TGS Give Your Home Insurance a Makeover

Are you wondering if your home insurance is enough to cover your upcoming renovations? Our team of insurance experts is here to answer all of your questions! With our roster of over 55 A-rated carriers, we will shop for your home insurance to maximize your savings during and after your renovations. Let us give you peace of mind with the coverage you need at a price you can afford. It all starts with a free, instant quote on your home insurance.