Renovating Your Home? Don't Make This Mistake
by Maurie Backman | Published on Oct. 7, 2021
If you're doing major home improvements, there's one important phone call you need to make.
There are plenty of good reasons to renovate your home. Maybe you're planning to sell it in the near term and want to increase its resale value. Or maybe you just want to make your home more comfortable or carve out more living space by finishing a garage or basement.
You're probably aware that if you're going to renovate your home, there are certain steps you should take before diving into that project. For one thing, you'll want to price it out and set a budget to ensure that you don't go overboard. You'll also want to figure out how you'll be paying for the work at hand, whether it means borrowing against your home or taking out a renovation loan.
But there's another important item to check off before embarking on home renovations -- calling your homeowners insurance company. And if you don't make that move, you might really regret it.
Why you need to loop your insurance company in
There are a few reasons why it's important to contact your insurance company when you're making home renovations. For one thing, renovating your home could change the amount of money it takes to rebuild if it were to get destroyed.
Homeowners insurance plans take into account the replacement costs of a property. If your home features an unfinished basement and outdated kitchen, it might cost a certain amount of money to replace it. But if you then finish your basement and turn a small, dated kitchen into an upgraded one, the cost to replace your home could rise. So it's important to get in touch with your insurance company in the course of your renovations to help ensure that your coverage is adequate.
To be clear, renovating a home may not change the amount of replacement coverage needed. This especially holds true for a minor remodel. But it's a call worth making to find out.
Another reason it's good to contact your insurance company is to make sure you have adequate coverage in the event of an injury or property damage during the remodel itself. Licensed contractors tend to have their own insurance, but if you're doing the work yourself, it's important to make sure you're covered in case something goes wrong.
Finally, some homeowners may need more liability coverage after completing a home renovation. This won't always be true, but in a situation where a homeowner adds a feature like a swimming pool, that's something that may be necessary. Having that talk with your insurance company will give you the answers you need.
Now before you worry that renovating your home will result in higher homeowners insurance premiums, you should know that that may not be the case. Plus, some home updates can actually save homeowners money on their insurance. For example, homeowners who install safety features like storm doors or storm shutters could see their rates go down.
The bottom line? Communicate with your insurance company when renovating your home. It's an easy but important step to take.
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