Remodeling Your Home This Year? Don't Forget This Important Step

Remodeling your home is a great way to make your space feel more modern and inviting while also adding to your home's value. It can be time-consuming and expensive, though, which is why you probably only want to do it once.

Having a clear plan of action is important, but so is taking steps to protect your newly remodeled space financially. Here's one step you don't want to forget.

Remodels increase more than your home's value

One of the main reasons people remodel their homes is so they can get more money for them when they eventually sell. But increasing the value of the home also leads to higher repair costs if the home is damaged in a fire or natural disaster.

That's why it's crucial to update homeowners insurance coverage when remodeling. Without additional coverage, homeowners could find themselves without enough insurance to rebuild after a total loss. They might have to borrow money to pay for what their insurance policy doesn't or they may have to settle for a smaller, cheaper rebuild.

Purchasing more homeowners insurance could help homeowners avoid this. It's pretty straightforward. Homeowners can contact their existing insurer and notify them of the planned updates. Then, they can work with the insurer to figure out how to adjust their policy limits. Or homeowners can shop for a new policy altogether.

In some cases, an insurance agent may need to inspect the home before it will sell or update a policy. If so, the company should notify the homeowner and schedule a visit when it's convenient for both parties.

How to find a great deal on homeowners insurance

It's not a bad idea to get quotes from several homeowners insurance companies before deciding which to work with, unless the homeowner has a specific reason for staying with their current provider. Rates can vary considerably because each company has its own risk algorithm.

The average annual homeowners insurance premium was $1,787 in 2023, but a lot depends on the home in question, including its location, size, and the quality of its finishes. Comparing rates from at least four to five insurers is the best way to find a great rate.

Homeowners insurance discounts can also help, although there usually aren't as many opportunities to save as there are with auto insurance. Still, things like bundling home and auto, having a new home, or replacing the home's roof can all translate to savings. Those who think they may qualify may want to seek out insurers who reward these things.

Finally, homeowners may consider raising their deductibles if they wish to lower their monthly premiums. However, doing this also increases out-of-pocket costs if they need to file a claim. It's helpful to save for the deductible in an emergency fund so it's close at hand if a disaster occurs.

Getting homeowners insurance quotes can take longer than getting auto insurance quotes because it's often not possible to purchase a policy online. So it's best to begin as soon as possible -- even before the remodel is complete -- to ensure the home is fully protected.