4 Major Home Renovations that Impact Your Homeowner’s Insurance Needs


Have you considered how your home insurance needs might change after your house undergoes major renovations?

Taking on a major home renovation can be an exhilarating time in your life. You’re taking the opportunity to fully customize your house to realize all the dreams you’ve had. Plus, you know that you will ultimately be likely to reap the rewards for all your hard work when the day comes that you must sell.

Although it’s exciting to tailor the floor plan and construction materials to suit your lifestyle and taste, don’t overlook an essential step in the remodeling process—a discussion about your changing needs with your home insurance agent.

The more changes you are making to your home, the more essential this conversation becomes. You are adding value to the structure. However, you might also be making selections that reward you with discounts.

Having a chat with your local agent ensures that you insure your newly revamped residence appropriately.

Here are four renovations that can cause your homeowner’s insurance needs and/or premiums to fluctuate.

Kitchen and Bath Renovations

Kitchen and bath remodeling boosts both your enjoyment of your home and likely increases your home’s value. If you’re renovating these rooms right now, then you know firsthand that this overhaul represents a significant investment.

Therefore, you don’t want to take the risk of losing that investment by not ensuring that you carry enough insurance to cover a loss if the unthinkable happens.

For instance, imagine that your master bathroom formerly had a contractor-grade vanity, vinyl flooring, and faux-marble countertop.

Now, imagine that you’ve spent your hard-earned money to revamp the bath and went the whole nine yards. You’ve installed heated floor tiles, towel warming racks, an upgraded shower, luxurious cabinetry, and a granite vanity top.

These upgrades not only improve the appearance and make your life comfortable, but they also cost more to replace should it ever become necessary. While this upgrade will likely trigger an increase in your premiums, there could be a silver lining.

If your contractor installs systems that qualify you for discounts, like an automatic water shutoff device that senses moisture and prevents a flood due to faulty pipes, you could offset some of that cost.

How do you learn about such potential discounts? Check in with your local insurance agent before you implement your renovation plans, as discounts vary from state to state.

Pool Installation

What if your dream home renovation isn’t inside your home at all, but a luxurious resort-style swimming pool that you’ll enjoy all summer long?

Not only will a pool turn your house into the ultimate summertime hangout spot, but it can also put you at increased risk.

First, the pool and any surrounding structures such as the pool deck, pumphouse, and fencing must carry coverage in case of a loss. All the trappings that go with pool ownership add up to a tremendous amount of money—fast.

Perhaps more importantly, however, is the personal liability section of your policy. Many homeowners opt for less than $300,000 of liability protection in their policies to minimize their premiums.

However, the rewards of a swimming pool equate to higher risks. This additional responsibility means that you should carry an increased amount of personal liability insurance to protect yourself—this is not the time to cut corners!

Your local insurance agent can paint a clearer picture for you on what types and how much coverage you need.

Roof Replacement

A roof replacement is money well-spent. It amplifies both the curb appeal and the energy efficiency of your residence.

However, it does more than look fantastic. In some cases, it might also reward you with discounts on your home insurance plan. Here’s why.

Your roof protects your structure from rain, wind, snow, and hail. Therefore, specific grades of shingles, hurricane straps, and additional waterproofing measures during the roof installation minimize the risk of damage during a weather event.

One caveat. You’ll probably need the contractor to document the materials and methods used during the installation to provide proof to your insurer.

Before you begin the roofing work, check with your insurance agent for all the details in your state and how you can take advantage of these potential discounts.

Equipping a Home Office or Workspace

If your dream is ditching your nine to five and turning your passion into a full-time career, you will probably spend some money outfitting an office, studio, or workshop.

Your existing policy might cover your equipment for a home-based business…but it might not, or it might but with limited coverage. You should review your policy and ask your agent about this.

All home-based businesses require equipment. Some might need only a laptop, printer, and office furniture (like a web designer or graphic artist). Others can be a full-scale production environment (such as an embroidery business that requires specialized machinery).

Additionally, if clients come to your location to pick up merchandise, attend classes, or meet with you, could need increased liability protection.

You could possibly add an endorsement to your existing homeowner’s policy to cover potential losses or need a separate business policy. Your insurance agent is the resource to guide you on this matter.

The Takeaway

Tailoring your residence to suit your needs through home renovations is a significant investment of your money, time, and dreams. Be sure that you chat with your insurance agent as you plan the work to ensure that you have the appropriate coverages and to see if you might qualify for discounts.

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