The Impact of Home Renovations on Your Home Insurance Policy

Making physical additions to your home or enhancing its features can be exciting and rewarding projects. However, whether you’re building a deck onto the back of your house, erecting a gazebo on the property, adding a new wing to the residence or upgrading your kitchen, careful and comprehensive planning is essential. These meticulous preparations include many necessary steps, such as consideration of how the project may impact your homeowners insurance needs and coverage. round clear glass-top table and five gray chairs dining se

Why Do Renovations Impact Homeowners Insurance?

Adding new structural elements or features to your home can have multifaceted implications for your homeowners insurance. Renovations and additions typically add value to your home, potentially making it more risky to insure. For example, if a covered incident, such as a fire or explosion, causes damage to your home, your insurance policy can be used to recoup losses. However, if the damage in question will cost more to repair, such as your kitchen being upgraded or your home’s footprint having grown, your claims will be more expensive. This means your carrier may need to increase your premiums to account for their potentially greater future costs.

You should also be aware of how new home features could impact the liability coverage portion of your home. For example, adding a swimming pool, firepit, playground equipment or other attractive nuisance to your property could increase your liability risks. People using such facilities or features, even without your permission, could sue you if they accrue losses while doing so. As such, your homeowners insurance policy may need greater coverage limits for liability losses, which could increase your rates.