Young couple examining blueprints during home renovation process

How Renovations Can Impact Your Homeowners Insurance

Ready to upgrade your home? Maybe you’ve just moved and want to install a pool. Perhaps you plan to transform the unfinished portion of the basement into an entertainment space. Or perhaps it’s time to finally replace that roof.  Do you actually need homeowners insurance for homes in need of repair?

Check with your insurance agent about any changes to your homeowners insurance during construction before hiring a contractor or going the DIY route.

Types of Projects that Affect Your Homeowners Insurance

Are you taking on home renovations that increase your home’s value? The type of renovation can change the amount of homeowners insurance coverage you need. Also, you must check with your city or homeowner’s assoication (HOA) about what permits you may need. Some additions and projects require permitting and can adversely affect your home’s value if done without a permit. Here are a few common scenarios that can affect your insurance policy:

Expanding Your Home with a New Addition

Adding square footage to your space — whether building out a new entertainment area, finishing the basement, or adding an extra bedroom — increases your home’s value and increases your home’s replacement cost if damaged or destroyed.

Upgrading Your Kitchen

Getting rid of those builder-grade cabinets and kitchen appliances that went out of style in the 1990s? Quartz or marble countertops, new flooring, and that shiny gas range you’ve had your eye on all increase the visual appeal of your space — and potentially your personal property coverage.

Replacing the roof

Your home’s roof provides a buffer from rain, wind, heat, cold, hail, and snow. Over time, however, these elements cause wear, necessitating roof replacement. Composition and asphalt shingles last anywhere from 12 to 30 years, whereas metal roofs can last more than 50 years. The National Roofing Contractors Association recommends a twice-a-year inspection of your roof for signs of water damage, sagging, rot, or any missing shingles.

Building a deck

The advent of the COVID-19 pandemic got everyone outside, making decks and outdoor entertaining spaces more popular than ever. Before you begin a deck project, check your homeowners insurance. A deck attached to your home should fall under your dwelling coverage.

Installing a pool

Pools are a great way to add entertainment value to your backyard, offering a cool respite from hot days. Keep in mind that swimming pools increase your liability, so ask your insurance agent how it affects your personal liability coverage before you add that sparkling centerpiece to your yard.

Is Your Home Covered During Renovations?

Your homeowners insurance should cover your home throughout renovations. Since each policy is different, and the scope of your work will vary, reach out to your insurance agent before construction gets underway. Upgrading your kitchen with all-new materials and new appliances? The value of your home — and therefore the replacement costs to your dwelling and personal property — will increase, so you’ll need to make sure you have the right amount of coverage for these upgrades.

Certain improvements, such as replacing your HVAC system, upgrading electrical wiring, or replacing your roof, may reduce your homeowners insurance premium depending on your current policy.

Verifying Your Contractor’s Insurance

Any contractor who works on your home should have comprehensive insurance that includes workers compensation, property, and liability. Ask anyone you may hire to see their certificate of insurance to confirm they have the right coverage and ask them how they hire subcontractors. While their insurance should cover any issues during the renovation process, it doesn't take into account poor workmanship, so make sure you thoroughly vet anyone making updates to your house or property.

A little planning on the front end allows you to enhance your home’s systems, appliances, and potentially its value. Talk to a Mercury agent about affordable affordable homeowners insurance today.