Home Improvements

Planning a home renovation can involve fun activities such as designing a new floor plan or picking fixtures and paint colors.  Having a heart-to-heart with your home insurance carrier may not be part of your preparations.  But it should be.

A renovation may affect the value of your home or the liability issues.   Anything that changes the structure or use of the property can change your policy.

Many house improvements that boost your home’s value could render your home insurance inadequate and leave you vulnerable to losses.  Other upgrades may trigger lower premiums — savings you don’t want to miss simply because you didn’t call your insurer.

Here’s how three common home upgrades or repairs can affect your homeowners insurance policy, both positively and negatively.

New roof

A new roof may save you money when it comes to homeowners insurance, by possibly cutting your premiums by 5 percent to 10 percent.

The roof is probably the single biggest factor affecting your policy.  That’s where the majority of losses due to snow, wind, hail and rain occur.

While most home policies cover roofs, some insurers use depreciation schedules based on the age of the roof to determine how much protection you get.  If it’s too old, some policies won’t cover it at all.  But the newer the roof, the more the insurer will spend to replace it.

New pool

A pool may make you the most popular house on the block, but it means your home is the riskiest, too, from an insurance standpoint.

Everyone in the neighborhood wants to play in your pool. It increases your exposure to loss.

The standard policy usually comes with $100,000 in personal liability protection, which would cover medical costs for a person injured in your pool and any legal expenses if you’re sued.  However, an insurer may recommend that a pool owner opt for at least $500,000 in liability coverage, which would cost more.

The insurer also may require a fence around the pool with a lock to cover the newly built liability.  If the pool has a diving board or slide, it will be considered an even greater potential hazard.  Hot tubs bring added danger, but the risk can be mitigated with covers and locks.

Also, don’t forget to increase your homeowners coverage amount to compensate for the value of the pool.

More living space

Sometimes a home needs to grow to accommodate an expanding family.  That can mean adding more livable square footage where none existed before, such as in a dank basement or humid attic above the garage.  In other instances, a new addition may be in order.

Your insurance will need to be altered to account for the value of the new space, in case a catastrophe strikes.  If you add 1,000 square feet to a home, it could add anywhere from $100 per square foot or more to your home.

Let your insurer know about any major addition even before you begin.

You may need to consider other types of coverage for the newly built-out areas of your home.  A finished basement with new carpet, drywall and insulation may need water backup coverage if the sump pump is located there.

And if you plan to rent out the new space, you’ll need landlord coverage.

For any questions concerning any Home Improvements please call, email or inquire online with our EBIA staff.