Your roof needs to be replaced. The kids have been begging for a pool and you've finally succumbed to their incessant requests. You've decided to remodel your outdated bathroom and kitchen. Any change to the structure or use of the property could possibly mean that you need to change your policy. However, you'll never know until you contact your insurance agent, which you should do before any type of major home renovation. A Homeowner's policy should be based on Replacement Cost (or some would argue Reconstruction Cost) which means replacing new-for-old. The general rule then is this - if you are strictly replacing one thing with another of similar quality then there is probably no change in 'Replacement Cost'; if you are making a major upgrade then there probably is an increase needed (think replacing a roof with a similar roof material -vs- remodeling a kitchen with the cabinets and counters that you've always wanted).
Some home renovations can reduce insurance premiums
Home renovations don't necessarily mean that your insurance rates will increase. Some insurance carriers offer lower rates if a roof has been recently replaced, so getting a new roof may actually help lower your insurance costs. Adding safety features such as security systems and alarms can provide discounts and cut costs in your premium. These practices vary from carrier-to-carrier so you should always ask us if we have additional credits available related to your particular project.
Make sure your insurance protects you during construction
While certain upgrades provide safety discounts, other improvements may require more or different insurance and may result in higher insurance premiums such as more living space, upgrades to kitchen or bathroom, and the installation of a pool. Adding an addition to your home equals more square footage and more value to your home. Insurance companies look at how much it would cost to rebuild your home if a devastating event were to occur. Your new premium would reflect that added square footage. The most important reason you'll want to contact us before the addition is made is to be covered in case something were to happen mid-construction. There are special policies like Builder's Risk policies to cover building materials and buildings under construction and these are often excluding under standard policies.
From an insurer's point of view, one of the most expensive additions to your home is a pool since not only should you insure the structure, but also obtain liability insurance to prevent against legal action taken against you should someone get injured. Pools and trampolines are known as "attractive nuisances" and require safety precautions and can affect your homeowner insurance premium or even make you ineligible for certain insurance carrier programs.
Check with us to make sure your insurance matches your renovation plans
Regardless of the magnitude of your home improvements, it's best to be upfront and honest about what changes are being made so that your policy can reflect and cover your home accordingly. You'll want to have enough coverage while taking advantage of all the possible discounts. Start the conversation with your agent. Home improvement is exciting and insurance doesn't have to dampen that excitement!
For any home insurance questions, call or contact Mitchell Insurance, Inc. today.
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