Why do home renovations affect your insurance?
Certain home renovations can increase the value of your house or impact potential risks – both of which can affect your homeowners insurance. On average, renovations to your home increase its value by at least 25%, but most homeowners don’t increase their coverage accordingly. Disclosure 1 If you’re planning on tackling any of the home renovations listed below, remember to reach out to one of our insurance professionals to make sure your insurance coverage is up to date.
1. Updating kitchen or bathroom
Kitchen and bathroom renovations account for about 80% of all home renovations. Disclosure 2 New counter tops, new floors, new appliances, maybe even a new layout all together -- all of the exciting design aspects of the renovation add tremendous value to your home. Talk to your insurance provider to determine if the renovations will increase your property value, and subsequently, if you need to increase your coverage.
Also note that most homeowners insurance plans don’t cover the financial burden of repairing or replacing appliances or systems in your home that break down due to everyday wear and tear. For additional coverage, consider adding a home warranty plan.
2. Adding on to your home
Whether you’re building a garage, a large deck, or a whole addition onto your house, expanding your home will increase its square footage and its value. Whenever the value of your home increases, you may need to increase your coverage as well. If you’re building a deck off of the second story of your home or higher, you might need to adjust your policy to cover the increased risk associated with the new addition.
3. Finishing the basement
Finishing your basement means increased livable space, increased value, and increased risk of damages due to flooding. Most homeowners insurance plans don’t cover flood damages, so you should review your policy with an insurance professional and discuss ways to protect your basement from flooding.
4. Installing a pool
Experts estimate that adding a pool to your property can increase its value by about 7% Disclosure 3 However, it also increases the risk of accidents on your property. Having a pool usually makes your house the go-to spot during the summer months, which means more guests at your house and a greater possibility of someone slipping and falling around the pool. An insurance professional will most likely recommend that you increase your liability coverage, and add additional safety measures (e.g. building a lockable fence around the pool, forgoing diving boards and slides, etc.). Disclosure 4
5. Replacing your roof
Redoing your roof not only can increase the value of your home, but it can also result in lower premiums. A newer, stronger roof means there’s less risk of wind, heavy rain, and hail causing costly damages to your home. Check with your insurance carrier if redoing your roof makes you eligible for any discounts.
Does your contractor have proper coverage?
If you’re hiring a contractor for your home renovation, remember to always ask for proof of insurance. A contractor not having the necessary coverage to safely complete your project (such as general liability insurance and worker’s comp) is a huge red flag, and you should look for another contractor.
Review your homeowners insurance policy
Natural disasters and accidents such as hurricanes, tornadoes, and electrical fires happen to unsuspecting – and ill-prepared – homeowners every year. If something were to happen to your newly renovated home, it would be devastating if all the hard work, savings, and time you put into those renovations went to waste. Talk to your McGriff broker today to check if your home has adequate coverage.
© 2021 McGriff Insurance Services, Inc. All rights reserved. McGriff Insurance Services, Inc. is a subsidiary of Truist Insurance Holdings, Inc. The information, analyses, opinions and/or recommendations contained herein relating to the impact or the potential impact of coronavirus/COVID-19 on insurance coverage or any insurance policy is not a legal opinion, warranty or guarantee, and should not be relied upon as such. This communication is intended for informational use only. Given the on-going and constantly changing situation with respect to the coronavirus/COVID-19 pandemic, this communication does not necessarily reflect the latest information regarding recently-enacted, pending or proposed legislation or guidance that could override, alter or otherwise affect existing insurance coverage.
This communication is intended for informational use only. As insurance agents or brokers, we do not have the authority to render legal advice or to make coverage decisions, and you should submit all claims to your insurance carrier for evaluation. At your discretion, please consult with an attorney at your own expense for specific advice in this regard.
Bankrate, “5 renovations that can impact your home insurance,” accessed May 12, 2021, https://www.bankrate.com/insurance/homeowners-insurance/home-insurance-and-renovations/
Forbes, “America's Most Popular Home Remodeling Projects -- And What They'll Cost You,” accessed May 13, 2021, https://www.forbes.com/sites/discoverpersonalloans/2018/05/14/americas-most-popular-home-remodeling-projects-and-what-theyll-cost-you/?sh=9d12b651d592
Houselogic, “Do Swimming Pools Add Value to Homes?” accessed May 13, 2021, https://www.houselogic.com/by-room/yard-patio/what-to-consider-before-building-pool/
Travelers, “6 Home Renovations that Can Affect Your Insurance,” accessed May 13, 2021, https://www.travelers.com/resources/home/renovation/6-home-renovations-that-can-affect-your-insurance
Insurance products and services offered through McGriff Insurance Services, Inc., a subsidiary of Truist Insurance Holdings, Inc., are not a deposit, not FDIC insured, not guaranteed by a bank, not insured by any federal government agency and may go down in value.
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