The amount of homeowner's insurance you purchase depends on factors such as your home's size, condition and the cost to rebuild it if a disaster were to occur. But if any of those factors change, like adding a sunroom or laundry room or expanding your kitchen, then your homeowner's policy will need to be adjusted to cover that additional value. But the impact of your renovations don't end there. If you are contracting out work on your property, there is additional liability involved.
Before you start any major renovation to your home, you should have your J.P. Perry agent review your homeowner's policy for any needed updates. Depending on the type of renovation you are doing, your agent might recommend...
1) Increasing the amount of insurance you currently have to cover the increased value you are adding to your house.
2) Increasing your liability coverage limits during the renovation. This helps protect you if someone who doesn't live with you is injured while working on the renovation project.
3) Increasing your liability coverage after the renovation. If your renovation includes an "attractive nuisance," such as a swimming pool or hot tub, you may need to increase liability coverage permanently, which you could do with an excess or umbrella policy.
4) Increasing your coverage for personal possessions. If you purchased costly items as part of your renovation, such as expensive furniture or art, then you may need to increase your personal property coverage limits.
5) Adding "dwelling under renovation" coverage. This type of insurance protects building materials from damage or being stolen at or en route to your property.
6) Adding vacant home insurance. If you live at another location while your home is being renovated, and you're away more than 60 days, you may want this coverage to protect you if damage or theft occurs and goes unnoticed.
Along with all of your efforts to protect yourself with insurance coverage, it's important that any contractor or vendor you use also is adequately insured, or they could sue you if they get hurt on the job. You should ask to see a copy of your contractor's insurance policies, including a commercial business/general liability policy, as well as workers compensation. If possible, it would be a good idea to take a photo of these policies for your records. If a contractor can't or won't verify their insurance coverage, that could be a warning sign.
In most cases, renovations will increase your insurance premiums. However, there are cases where your renovations could result in some rate reductions. For example, of you install higher grade roofing materials or shatter-resistant windows, not to mention smoke detectors or burglar alarms, you could get discounts.
In summary, when you are considering renovations, you need to remember your existing coverage may be too low for your home's increased value and liability. You should always talk with your J.P. Perry agent before you begin renovation work so that you will be protected during and after construction.