There are many benefits to remodeling your home. In addition to the obvious joy you get from completing upgrades and personalizing your space, many home renovations also boost the resale value of your home.
Some home remodeling projects are relatively easy to do, even for the inexperienced do-it-yourselfer. Others take a little more know-how, experience and confidence to take on. Others still are best left to the professionals, such as full additions and other work that requires the services of a structural architect.
While you likely have a lot on your mind during major home renovations, one thing most people don’t think about is their insurance. Below, we’ll discuss some of the ways that home remodeling affects home insurance policies, and any extra coverages you should consider during the remodeling process.
Increased Value May Required More Coverage
The insurance policy you signed up for when you purchased your home might not completely cover you once you complete renovations to the property. Your insurance premium was based off the original specs of the property, including the bedroom and bathroom count, overall square footage and features of the home.
If your home remodel is going to significantly change any of these factors, you should confer with your insurance agent. For example, if you are increasing the square footage and living space of your home, you will likely need to increase the insurance coverage you have.
Likewise, if you are taking on a major remodel such as to bathrooms or a kitchen, that could increase the replacement value of the home, which could necessitate a larger insurance policy.
Some projects such as adding a pool could increase your liability risk. This is something to consider and talk to your agent about before taking on this remodel.
Check Your Liability Coverage
It’s also a good idea to check the liability coverage of your current home insurance plan when you’re doing a home remodeling project. This comes into play not just for risky things such as a pool — as mentioned above — but also for other times when someone might get injured on your property.
Contractors should have their own liability coverage — more on that a bit — so you shouldn’t have to worry too much about that aspect on your own home insurance policy.
However, if you are doing the remodels yourself, asking friends and family to help you, or hiring an uninsured handyman to do the work, then you should definitely consider how much liability coverage you currently have and whether you need to increase it for the remodel.
An experienced insurance agent can help you walk through this process, and help you determine what level of liability coverage you might need.
Ensure Contractors Have Proper Coverage
If you are hiring an outside company to complete the remodel, you want to make sure that they have the proper insurance coverage just in case anything goes wrong. Of course, you shouldn’t assume that something will go wrong, but it’s better to be safe than sorry.
Any contractor that you hire should have proper workers compensation, property and liability insurance on their own. It’s a good idea to ask them to give you a copy of their insurance certificate to prove they have this coverage. You also might consider only hiring contractor that are bonded, which provides additional coverage that their commercial general liability plan might not.
If your contractor is going to have subcontractors on the job, ensure they have the proper insurance as well.
All of this will protect you in case something goes wrong during the remodel, as you own home insurance policy might not provide you with coverage if, for instance, a worker gets hurt on the job or causes other damage to your home.
Other Coverages to Consider
There are additional insurance policies that you might consider on a temporary basis when your home is undergoing a significant remodel. These coverages aren’t something you would carry long-term, but only during the period of the remodel to provide you with extra protection.
- Construction Material: This specific insurance would cover all the materials that are needed for your renovation while they are at your property, being stored off-site or being transferred to your property. If these materials are stolen or damaged during the remodel, you’ll have coverage for them.
- Foundation: During certain projects, hydrostatic pressure will come into play. This could cause your foundation to crack or even collapse. This would be covered under an additional “Dwelling Under Renovation” insurance policy, but not your typical home insurance policy.
- Vacant home: If the home remodel requires you to live somewhere else for a period of time in excess of 60 days, you can get vacant home coverage. If, let’s say, your home sustains storm damage that goes unnoticed until you return weeks later, this insurance would provide coverage your regular policy might not.
Work with Signature Insurance During Your Remodeling Project
Home remodeling projects are very exciting. They bring a great deal of joy to homeowners, and a lot of value in the long run as well.
At the same time, remodeling projects do bring with them some risk. Unfortunately, not all of these risks will be covered under your home insurance policy, either. That’s why it’s important to assess your current insurance plan and your potential risks before any remodel project to determine whether you need to make any changes or additions to keep you protected.
An experienced home insurance agent will be able to help you determine just what you need before you start your home remodel project.
At Signature Insurance, we have been covering Michigan homeowners just like you for years, and have experience in all aspects of home remodeling projects. Call us today to find out how we can help keep you protected during a home remodel project.
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