Before Renovating Your Home, Review Your Insurance Policy
What changes could affect your coverage?
Shanti
10/24/20261 min read
Before Renovating Your Home, Review Your Insurance Policy
Renovating your home can make it more comfortable and increase its value, but it may also affect your homeowners insurance coverage. Before work begins, keep in mind that insurance generally does not pay for the renovation itself, and some improvements may require a review of your coverage.
Does homeowners insurance pay for renovations?
Homeowners insurance generally does not pay for the cost of the project, materials, or repairs to fix a contractor’s poor workmanship. However, some losses or liability claims may be covered if an accident happens during the renovation. For example, coverage may apply if a contractor causes a fire or damages your home, or if you are legally responsible for someone getting injured on your property. Any payment depends on the terms and limits of your policy.
What changes could affect your coverage?
Adding a room, finishing a basement, or building a deck may increase your home’s value or the cost to rebuild it. As a result, your current coverage limit may no longer be enough to rebuild your home. Other improvements, such as replacing the roof, updating the wiring, or installing a security system, may reduce the risk of damage and affect your insurance rate. The exact impact depends on your insurer and policy details.
What should you do before work begins?
• Talk with your insurance agent or company about major projects.
• Choose a contractor who has the required licenses and valid insurance.
• Ask whether you need temporary coverage or a change to your policy while the work is underway.
• After the project is finished, make sure your home and personal property coverage still fit your needs.
A swimming pool, hot tub, or similar feature may also affect how your home is insured. Before installing one, ask about coverage and potential liability.
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