Summer is a popular time for home renovations, including roof repairs, kitchen remodeling, or adding a new deck. There are a few things you might want to consider before you begin, including how your home improvement project could affect your homeowners insurance policy.
Are you covered? Inform your insurance agent before starting any major work on your home. You may need to update your homeowners insurance or get extra coverage during the project.
Is your contractor covered? Before signing an agreement with a contractor, verify that they have proper insurance coverage. You should get copies of their commercial or general liability insurance, as well as their workers’ compensation insurance. If they aren’t willing to provide this documentation, you may want to consider a different contractor. You can learn more about avoiding fraudulent contractors here.
Learn about your liability. There can be added risks during a home renovation project, so you may need more liability coverage than your existing homeowners insurance policy provides. If you’re going to enlist the help of friends and family, you may want to look into medical payments coverage.
Document everything. Keep receipts, contracts and take photos throughout the process. If possible, you could even hold onto samples of the materials used. You’ll also want an up-to-date inventory of your home and belongings when it’s time to renew your insurance policy. If you’re not sure how to inventory your home, the Insurance Information Institute (III) has tips can help you get started.
Reevaluate. It’s important to reevaluate your homeowners insurance when the project is complete. Major home renovations, like repairing your roof, may increase the value of your property and therefore the cost of rebuilding your home. If you’ve added more valuable items inside your home, like a new television, you may want more personal property coverage. If you’ve added a pool, you may want more liability coverage.
Save money. Certain home renovations can make you eligible for discounts on your insurance. Improvements like electrical and plumbing updates, or adding safety devices and energy efficient appliances could save you money. Check with your insurance agent to see if your updates qualify you for any savings.
Other coverage needs. Home improvement projects sometimes follow major life events, like marriage or the birth of a child. If that’s the case, it may be time to reevaluate your insurance needs outside of your homeowners policy, like updating your life insurance policy.
