Renovations That Can Impact Your Home Insurance

According to research, Americans spend approximately $400 billion yearly on home renovations.

If you’re planning to renovate your property this season, you should know that a lot goes into ensuring you get the bang for your buck. While renovating your home, you may also come across a few surprises that could increase your total expenses―one of these could involve your home insurance. Although some home renovations can decrease the premium rate on your home insurance, a few others can also increase it. So, you’d want to ensure that you always make the right upgrades.

Western Mass Auto Insurance will help you understand how to adjust your home insurance if you plan to go for a home renovation project. Here are some home renovation projects that can boost insurance rates:

Home Renovations That Increase Insurance Rates

Although a home renovation can indeed build your home equity, it’s also important to mention that it can increase your home insurance rates. 

A recent study showed that home renovation prices increased by approximately 13% due to supply chain and inflation issues in the past year. So, it’s essential that you consider your insurance coverage when you’re planning a renovation.

1. Adding A Swimming Pool To Your House

While building a swimming pool can increase your home’s value and become an incentive for potential buyers if you ever decide to sell your house, it’s essential to remember that a swimming pool falls under the category of attractive nuisance.

A swimming pool will be considered a liability risk, and you’ll be held legally responsible if someone’s injured. 

Most home insurance agents recommend increasing your liability coverage if you’re a swimming pool owner. You can also buy umbrella insurance. This will offer a second layer of liability protection. 

2. Building A Home Office

Since the pandemic hit the world, working remotely has become a norm for many of us. So if you’re planning to add a home office to your house, it’s important to remember that it’ll increase your home insurance rates. The increased rates will offer coverage for business-related equipment and assets. 

You can also take out a separate home business insurance policy to protect yourself against potential work injuries or crime. 

Additionally, your home insurance policy will not offer liability coverage to your business in case of increased foot traffic. For example, if you’re offering dance lessons or pilates classes at your house, you’ll need an additional business policy to cover the liability risk. 

3. Expanding And Revamping Your Space

If you’re expanding your home with the square footage of your house, the premium rates will increase as you’ll require increased dwelling insurance. 

Additionally, even if the added space is not inside your house, you’ll still need post-renovation insurance adjustments. A newly finished deck might add value to your house, but your home insurance will require reassessments. 

4. Upgrading The Kitchen

According to Remodelling Magazine, upgrading your house will increase the recoup value by 50%. Suppose you have made quality upgrades to your kitchen, such as replacing laminate countertops with granite ones or installing custom cabinets. In that case, you’ll also need to increase your dwelling coverage.  

If you don’t have sufficient coverage before the renovations, you’ll have to pay out of your pocket for the new changes. Be sure to talk to your insurance agent beforehand. They’ll evaluate your coverage and inform you whether you need to increase your coverage or not. 

Renovations That Reduce Home Insurance Rates

1. Replacing Or Renovating Your Roof

Although getting a new roof may not be a fancy home renovation, it’ll help lower your home insurance premium rates. 

Replacing your HVAC system or an old damaged roof ensures your house will be better protected in extreme weather conditions, lowering your premium rates. 

Most insurance agents use depreciation schedules to evaluate the amount of coverage your roof gets. So the newer the roof is, the better your chances of getting increased coverage. 

2. Upgrading Your Plumbing Or Wiring

Although rewiring a house can be expensive, it can also reduce the risk of accidental fires and electric shocks. This helps your insurance premium because most insurance providers lower the premium rates if they know your house is protected against such safety hazards. 

Additionally, this is true for your plumbing as well. If you have an outdated plumbing system made of polybutylene or lead pipes, it can be difficult to get lower premium rates for that. You should consider upgrading your plumbing hardware to a modern one as it can reduce the risk of drainage or water pipe damage, consequently increasing the premium rates. 

3. Adding Sprinklers And Home Security Systems

Adding sprinklers and a home security system can offer you significant discounts on your premium. 

Home security discounts vary differently according to the systems. For example, your premium can be reduced a little if you install a home security system that rings an alarm every time an intruder enters your house. But your premium will significantly reduce if your home security system directly alerts the police or concerned authorities in case of any intrusion. 

Should You Increase Your Home Insurance After Renovating Your House?

Whether you should increase your home insurance depends on your coverage. When you buy a home insurance policy, insurance agents use valuation tools to decide how much home insurance coverage you require. 

If the renovation has increased your home’s value, you need to consider increasing your home insurance coverage. Because if you don’t, in case of any damage to your house, your home insurance won’t cover your new renovations, and you’ll have to pay out of pocket for the damage. 

Get In Touch With An Insurance Agent In Springfield

Our insurance agents at Western Mass Auto Insurance offer you low-cost and low down payments on home insurance. We’ll help you evaluate your financial standing and customize a home insurance plan to cater to all your insurance needs at the minimum possible cost.

We’re also offering a discounted price if you buy auto insurance along with home insurance. 

So hurry up and get in touch with one of our insurance agents to get started.