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Homeowner’s insurance
A renovation is one of the biggest projects you’ll ever take on as a homeowner. Maybe you finally built out that dream kitchen, added a guest suite, or turned a tired basement into a space your family can actually use. It’s a big investment, and once the contractors pack up their tools, you probably feel like the hardest part is over. But here’s the catch: your work isn’t finished until you update your homeowners insurance. Ignoring that step could mean your shiny new upgrades aren’t protected the way you think they are.
Why Renovations Change Your Coverage
Insurance isn’t static. The policy you bought before your renovation was priced and designed around the house you had then, not the home you own now. Renovations usually change two things that matter most to insurers: replacement cost and risk.
Higher Replacement Cost
Renovations nearly always increase what it would cost to rebuild your house. If you add square footage—a second story, a new garage, or just another bedroom—you’ve literally made your home bigger. That extra space raises the dollar amount needed to replace your house if it were destroyed. Even without adding square footage, luxury upgrades matter. A kitchen with granite counters, custom cabinets, and high-end appliances is far more expensive to rebuild than the simple version you had before. Even behind-the-scenes improvements, like new plumbing or electrical systems, push the replacement cost higher because you’ve invested in modern, more durable materials.
A New Risk Profile
Renovations also change how insurers view the risks your home presents. Some updates make your home safer: installing a new roof, replacing old wiring, or putting in a monitored security system could all lower the chance of a claim. Others increase risk. A pool or trampoline might make your yard more fun, but insurers consider them liability hazards. A wood-burning fireplace adds charm but also increases the chance of fire. Every change—whether it lowers or raises risk—needs to be reflected in your coverage.
Home renovation protection
How to Update Your Policy After Renovation
To make sure your house insurance keeps pace with your home, it helps to approach the update step by step:
- Talk to Your Insurer Before Work Begins: Call your agent as soon as your plans are ready. Although some homeowner’s insurance plans don’t cover homes that are being fixed up, you may need temporary coverage like a builder’s risk policy. If something goes wrong during building, make sure that your provider has both liability and workers’ compensation insurance.
- Document Every Detail: Keep track of receipts, contracts, permits, and photos before, during, and after the project. This record becomes proof of the work done, the materials used, and the value added. If you ever need to file a home insurance claim, these details make the process smoother and help your insurer adjust your policy correctly.
- Request a Post-Renovation Review: Schedule a policy review after the project. Your insurer will change your dwelling coverage based on your home’s replacement cost. This assures your homeowners insurance covers your current home, not your previous one.
- Discuss Liability and Discounts: If your project introduced higher risks, like a pool, increase your liability coverage. If you added safety features, like a roof upgrade or fire sprinklers, ask about home insurance discounts. These can sometimes offset the premium increase that comes with a higher replacement cost.
Extra Coverage Worth Considering
Big changes to your home are also the right time to think about risks that a standard homeowners insurance policy doesn’t cover. If you live in a flood-prone area, adding flood insurance may be smart. If you’re in an earthquake zone, earthquake insurance is worth considering. Renovations often increase your home’s value, and the last thing you want is to have that investment wiped out by an uncovered event. Check out umbrella insurance if your repairs included dangerous things for extra liability protection.
Why This Step Is Important
It’s easy to get caught up in the fun elements of remodeling, like the extra space, the new finishes, and the comfort. But money is important too. If you don’t update your policy, your home insurance claims process could not work when you need it most. If a fire damaged your recently finished kitchen and your previous insurance didn’t cover the new materials, what would you do? That gap makes it very important to get updated coverage.
Conclusion
Changes to your home’s value and safety are not limited to how it looks. Updating your house insurance is the last thing you need to do to preserve your investment. Take the time to look for house insurance quotes online, talk to your provider about how they set their prices, and ask the best companies how they may tailor coverage to your requirements. With the right adjustments, you can make your home safer and more appealing. Peace of mind is the last step in any makeover.
