Categories: Home Improvement

How Home Remodeling Can Affect Your Home Insurance Rates

Your home remodeling project requires thorough preparation. Aside from choosing the right materials and hiring a general contractor, one thing you have to consider is how your renovations can affect your homeowners insurance. 

If you’re planning for a major home improvement, you may need to increase the amount of insurance in your policy. For this reason, you should inform your insurance company and ensure you have the right amount of coverage. You may also need additional coverage should the renovation involve new construction. 

To learn more about the impact of your home remodeling on your homeowner’s insurance, be sure to read this article from Owens Construction. 

Building a Swimming Pool

Adding a swimming pool to your home can affect your homeowner’s insurance in two ways. While it can increase the value of your home and offer an incentive to prospective buyers, it can also be a liability hazard. Should someone get injured in a pool-related accident and press charges, you might face financial consequences. 

Thus, your insurer would recommend that you choose a higher liability coverage than what is standard. You might also want to consider purchasing an umbrella insurance policy, which means additional liability coverage. Your insurer may also have to advise you to build a fence with a gate around the exterior of the pool as a condition for coverage. 

Renovating Your Kitchen or Bathroom

A kitchen or bathroom renovation can also significantly increase the value of your home. If you’re planning to change your granite countertops or have custom cabinets built, you may need to increase your dwelling coverage, which may come at an additional cost. To be in line with your upgrades, consider increasing the coverage if it’s not enough to rebuild your new kitchen or bath. 

A claimable occurrence could happen during your kitchen or bathroom renovation. As such, you may be unable to rebuild or repair your upgrade features if your existing coverage is not enough. Additionally, if your kitchen or bathroom remodeling contractors upgrade the home’s electrical or plumbing systems, you may qualify for a discount. This may offset any increase in your insurance rate. It’s important to note that not all home improvement projects mean paying more for coverage.

Adding a Home Office

A home office can increase your home’s value for workers and home business owners. But before anything else, you may need to increase your homeowner’s insurance rates or purchase an additional insurance policy. This is particularly important for a business owner who uses specialized machinery or stores large amounts of supplies. 

Your insurance company may not also be able to cover liability related to the business. If your business requires heavier foot traffic in your home, such as private yoga sessions, you may need to enhance your existing policy or purchase an additional business policy. 

Expanding Your Space

If your family is growing, your home improvement contractors may recommend expanding your home to accommodate everyone. This means you’re likely increasing its replacement value, or the cost to repair or replace the property. This amount is specified in the dwelling coverage limit in your policy. Your dwelling limit will likely increase once your coverage is recalculated by your insurance company. 

Moreover, you may have to consider other types of coverage for the new spaces of your home. For instance, you may need water backup coverage for your finished basement with new carpet, drywall, and insulation if the sump pump is located there. Whether you expand your home indoors or outdoors, your insurance will need to be updated to account for the value of the new space. 

For more inquiries about home improvement projects, get in touch with Owens Construction. Our home remodeling experts will be able to provide quality assistance and services. Call us today at (614) 846-1149 or fill out our contact form to set an appointment.

Rebecca Burdock

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