Renovating your home? Talk to your insurance broker first
Whether you hire a contractor to carry out a major home renovation, or even decide to tackle an ambitious DIY home renovation, it’s a good idea to talk with your insurance broker. At DPM Insurance Group, our brokers and CSRs will gladly review your plans with you and let you know if your project may impact your insurance policy.
If nothing else, adding value to your home may change your insurance needs.
Why speak to your insurance broker about your home renovation?
Since your home and belongings are insured at a specific amount, making changes that increase the value of your home, or improve its overall safety, will affect the policy.
Let’s say you’ve decided to update your electrical wiring. A project like this can reduce the chance of an electrical fire, while replacing old plumbing can reduce the chances of water damage caused by leaks and corrosion. In these cases, your insurance premium could be reduced.
On the other hand, finishing your basement adds value to your home, which means your rates may increase slightly, to reflect the replacement cost if any damage were to occur. Roofs, eaves troughs and other upgrades don’t add a lot of value to your home, or affect your premium but they’re important because they protect your home from damage.
A broker or CSR with DPM will make sure that any work you do factors into your insurance premium so that you’re covered should anything unforeseen happen.
It’s also important to know that a typical homeowners insurance policy doesn’t cover dwellings under construction. Builder’s Risk coverage insures the value of a building during construction. The structure, materials, equipment and supplies are all covered under this policy if they are used to build part of the finished project.
What if I don’t tell my insurance advisor about my home renovation?
Depending on the scale of renovation, failure to disclose major home projects could void your current home policy.
Renovations are tricky and unexpected damage may occur. Many insurance policies state that your policy will invalidate should you fail to notify your insurer. At the end of the day, your insurance brokerage is here to help you navigate the insurance waters so you know how to protect yourself.
Factors that may affect your current home insurance policy
What information should you provide to your insurance advisor if you’re going through renovations? It depends on the type and size of upgrade being done.
If it’s large-scale like some kind of addition to your property, it’s quite likely that your advisor will want some more details such as the construction type, location, square footage etc. Since your renovations are likely to increase the value of your home, this information will make sure they’re properly covered.
You should still consult with your insurance advisor during DIY projects. It’s important to correctly evaluate the coverage required for a project even when you plan to do it yourself. Remodeling something like your kitchen where there are different electrical outlets and pipes could be costly if something goes wrong.
Will a home renovation affect your home insurance premium?
It depends on your renovation. If you’ve remodeled your master bathroom, your premiums may increase to reflect the money spent on upgrades, so you are covered should any future damage occur.
Once the renovation is complete, talk with your advisor right away to update your policy.
If you’re wondering when to consult with your insurance advisor, ask yourself: Are you maintaining your property or are you adding value?
Much like vehicles, homes require regular maintenance, which includes the things you do to ensure continued functionality and to prevent damage. This could mean painting, simple landscaping, fixing cracks in your foundation, or touching up grout in your bathroom. While it’s important, it’s not increasing value. In these cases, your advisor doesn’t need to know.
- This includes anything you do to add value to your property. Improvements include:
- Building a deck or adding a structure on your property like a shed or garage
- Upgrading plumbing and electrical
- Redoing your kitchen and bathroom
- It’s important to notify your insurance advisor when you’ve added value to your home, as it may affect your home insurance premium.
When in doubt, give us a call! We’re here to help you – it’s better to be safe than sorry.
Does your contractor need insurance when renovating?
When you hire a contractor, there are many risks. Your contactor should have insurance coverage for their business, which ideally includes liability coverage. For the most part, reputable contractors are comfortable disclosing these details to potential customers because any renovation projects should be adequately covered through their commercial policy and your personal one. Contractors should have:
Planning a home renovation?
If you’re planning a home renovation, DPM Insurance Group can help ensure you’re covered. Give us a call today to learn about how your home renovation could affect your policy.
Source: Broker Link