Your home is one of your biggest investments and protecting it means keeping your insurance up to date, especially when making renovations.

With spring approaching, many homeowners are taking on improvement projects, whether DIY or with the help of professionals. But before you start knocking down walls, it’s essential to understand how home upgrades can affect your homeowners insurance.

How Home Renovations Affect Your Insurance

Not all renovations impact your policy the same way. Minor updates, like painting or replacing carpets, typically won’t require policy changes. However, major upgrades, such as adding a room, remodeling a kitchen, or installing a pool can increase your home’s value and risk factors, requiring adjustments to your coverage.

Common Renovations and Their Insurance Impact

• Kitchen & Bathroom Remodels: These renovations often increase your home’s replacement cost. Since your insurance is based on rebuilding expenses, you may need to raise your dwelling coverage to avoid being underinsured.
• Room Additions: Expanding your home increases its value, which requires adjusting your coverage. More square footage means higher potential repair costs in case of damage.
• Finished Basements: Converting a basement into a living space can introduce new risks, such as water damage. Consider flood insurance or sump pump failure coverage to protect your investment. (For a more in-depth look at flood insurance, check out our recent blog on the subject.)
• Roof Replacement: Upgrading to impact-resistant or fireproof roofing materials can lower your insurance premiums, as many insurers offer discounts for durable improvements.
• Swimming Pools: While a pool adds value and enjoyment, it also increases liability risks, such as slips, falls, or drowning. You may need to increase personal liability coverage or add an umbrella policy for additional protection.
• Home Office Additions: Running a business from home? Standard homeowners policies do NOT cover business-related losses. You’ll need to secure additional  coverage for equipment and liability to protect against potential claims.

How to Update Your Policy After Remodeling

To ensure your insurance reflects your home’s new value and risks, take these steps:

• Assess Your Home’s Updated Value: Obtain an appraisal from a licensed real estate professional or keep receipts from renovations for an accurate estimate.
• Consult Your Rockingham Insurance Agent: Discuss policy updates to ensure your coverage matches your home’s current condition.
• Adjust Your Coverage Limits: Increase dwelling and liability limits if necessary to protect against new risks.
• Consider Additional Coverage: High-end appliances, luxury materials, or structural changes may require special coverage beyond your standard policy.
• Document Your Updates: Take photos and keep records of all renovations—this can streamline future claims processing.

Why Keeping Your Policy Up to Date Matters

Failing to update your homeowners insurance after a renovation can leave you underinsured. If your home’s value increases but your policy remains unchanged, you may not receive full compensation in case of damage. Additionally, unreported upgrades can lead to claim denials if insurers view them as undisclosed risks.

Protect Your Investment with the Right Coverage

Navigating home renovations can be complex, but you don’t have to do it alone. For guidance tailored to your specific needs, reach out to your trusted Rockingham Insurance agent today. We’re here to help you every step of the way, ensuring your home is well-protected, even as it changes.