Your home’s quality of life can be improved by finishing your basement, adding a sunroom, or remodeling your dream kitchen. These types of remodeling can have a negative impact on your insurance, and could lead to you being underinsured.
It’s a smart idea to review your homeowners policy if you are thinking about making any changes to your home or if you have one. Here are some things you need to know about home renovation insurance.
Inform your insurer about your remodeling
Before making any major changes to your home, contact your agent or your insurance company. They will be able to clarify the limits of your policy and recommend whether you need to adjust it.
Your dwelling coverage limit, for example, is determined by how much it would take to rebuild your house if it was destroyed. Major home improvements can increase the cost of replacing your home, so you might need to increase your dwelling coverage limit.
Do you need to add a fence or a shed? These items fall under your coverage for other structures, so you might need to increase it. To ensure that you have full coverage, consider increasing your personal property limit if you are buying furniture to add to an existing home or for high-end electronics.
You may also want to increase your personal insurance limit for swimming pools. The possibility of injury or drowning could make you a target for lawsuits.
An agent or insurance company can help you determine how much your premium will increase to reflect the new coverage limits. You might want to compare home insurance quotes from different companies if there is a substantial price increase.
Avoid the pitfalls of home renovation insurance
Your agent can help you avoid possible renovation pitfalls by having a proactive conversation. Your agent might recommend adding ordinance or law coverage. You won’t have to pay extra to ensure your home is compliant with local building codes.
Hire a licensed contractor and bond who has builder’s insurance coverage for large renovations. This insurance protects expensive construction materials from theft or damage while they are on your property. A building trade association can help you find a licensed contractor.
Also, make sure to inquire about whether the contractor has workers’ comp insurance. This will cover medical expenses for anyone who is injured while working in your home. The worker could file a suit against you if they don’t have this insurance. Check that the contractor’s coverage also covers subcontractors. If it doesn’t then they should have their own coverage.
If you are completing a home renovation, make sure to take lots of photos. Take pictures before, during, and after the work is completed. If you need to file a claim or redo the work, these photos could be very useful.
Take a inventory of your property
To ensure you have sufficient coverage for personal belongings, it is smart to do a home inventory at least once per year. It’s a good idea to do an inventory immediately after completing a renovation.
You can either use a home inventory application or move your phone around, taking video of all the things you own. You should focus on the most important items and open all drawers and closets to reveal what’s in them.
This will allow you to choose the best personal property coverage and pay you if you have to file a claim. A detailed inventory will show you what you had before the disaster. This will make it easier to file a claim.