When To Alert Your Insurance Agency Of New Home Additions

Table of Content

Home insurance for renovation projects

Frequently Asked Questions (FAQs)

Do I need to tell insurance about home improvement?

When should I update my home insurance?

How much does renovation insurance cost?

Do I need to tell insurer about building work?

Does home insurance cover renovations?

Does square footage affect insurance?

Does my house insurance cover bad workmanship?

How do I know if my house is insurable?

What counts as building work for insurance?

Can I claim insurance for renovation?

Does insurance pay for upgrades?

Why do I need renovation insurance?

Summary of insurance for renovations

When To Alert Your Insurance Agency Of New Home Additions

During the pandemic, home renovations rates soared as many Americans decided to stay in and apply would-be holiday funds to customize their homes. If you’re contemplating updating the look and feel of your house, you may be wondering, “does my home insurance cover renovations?” Additionally, it’s important to know when to alert your insurance agency of any planned changes to your house.

This article explores these key questions by evaluating the types of house renovation insurance coverage you may need to consider before you start renovating. The importance of knowing when you need home insurance during renovation and whether you need to increase home insurance after renovation is also discussed.

Home insurance for renovation projects

By speaking with your insurance provider early, they can give you expert advice on the types of insurance for house being renovated. Your renovations insurance coverage needs will change throughout the construction process, and you will need to know at all times, “does my home insurance cover renovations?” In addition to increasing the replacement value in your existing policy to reflect the increased value from renovating or remodeling, your insurance company may advise you to:

• Increase the no-fault medical cover on your homeowners policy. This will ensure that medical costs for any family or friends helping you renovate your house will be covered if they hurt themselves.
• Increase home insurance after renovation, particularly your liability cover. This is particularly important if your renovations include a swimming pool or other potentially hazardous additions of higher risk for insurance purposes.
• Get house renovation insurance for homeowners known as a dwelling under construction policy. Building materials are covered for theft or breakage on-site or en route to your house.
• Add vacant home insurance during renovation if you plan to stay elsewhere while you update your home.

Frequently Asked Questions (FAQs)

Do I need to tell insurance about home improvement?

Your homeowners insurance policy typically includes dwelling coverage, which should cover the total cost of rebuilding your home if it was damaged beyond repair. You need to tell your insurance company about your home improvement projects, as the extent of your coverage is based on the replacement value of your home.

As a home renovation generally adds your own personal touch and financial value to a property, the replacement value in your insurance policy should be updated. If you fail to update your insurance for property being renovated, you may be underinsured and out-of-pocket should you need to make a claim in the future.

You may also need additional homeowners insurance during remodeling and renovations to ensure you aren’t liable if anyone injures themselves while working on your property.

When should I update my home insurance?

You should inform your insurance company before starting to update your home. Your insurer will then be able to tell you if you have the right amount of coverage under your current homeowners insurance policy. They will also advise if you need to purchase additional types of home insurance during construction to protect yourself against financial liability.

You should update your insurance after the renovations or remodeling has finished ensuring your dwelling coverage is sufficient to rebuild your home if needed. You should also check that any new personal purchases are also sufficiently covered by your insurance. The Insurance Information Institute recommends you keep copies of your records and receipts and be ready to forward them to your insurer so that they can evaluate your needs.

An increase to your home insurance after renovations is often caused by an increased property value requiring a higher amount of dwelling coverage. In contrast, home improvements to lower insurance costs include those that reduce the chances of future damage occurring. For example, replacing an old leaking roof with a new weather-sealed roof may result in a discount on your insurance as you’re protecting against future water damage.

How much does renovation insurance cost?

A home renovation insurance policy may end up costing you additional premiums or upfront payments. Still, adequate insurance cover will save you a lot of money should something go wrong. You must notify your insurer of your intentions to undertake renovation or building work before commencing.

To renovate or remodel insurance changes are most likely necessary. Your insurance company will inform you of the additional coverage options you may need to purchase to be covered for the type and extent of renovations you plan to undertake.

The cost will depend on the type of add-on or standalone renovation insurance policy you purchase and what it covers. In general, you should consider:

• Increasing your no-fault medical protection cover to protect friends and family helping with DIY renovations.
• Obtaining dwelling under renovation insurance to cover theft or damage to building materials or damage to the house’s foundation during renovation.
• If your home needs extensive renovations. If so, you may benefit from the builder’s risk coverage for the building contents and equipment.

Every homeowners and renovation insurance policy is different. You should contact your insurer to determine how much renovation insurance will cost depending on the type and extent of your planned renovations or additions. Your insurer will be able to advise if your needs can be addressed through an add-on to your existing homeowners insurance or if you need a standalone policy.

Do I need to tell insurer about building work?

You don’t need to notify your insurance provider about minor renovations, such as painting your walls or hanging new shelves. This is because standard homeowners insurance will generally pay for accidental damage caused by a contractor or builder.

But if you’re asking, “do I have to tell insurance company about building work” – you do! You should alert your insurance company if you plan on undertaking significant building work. This notification should occur before beginning any significant renovations.

Your insurance company may require you to increase your insurance premium if you make major alterations or you risk not being covered should something go wrong.

Does home insurance cover renovations?

Are you wondering, does my home insurance cover my renovations? If so, the answer is yes but only up to a certain extent. If the upgrades add additional value to your home, you may be underinsured until you tell your insurer the updated replacement value of your home.

You may also need additional house renovation insurance to protect yourself against financial liability should someone be injured while working on your home renovations. The Insurance Information Institute recommends increasing your no-fault medical protection to cover friends, families, or other non-contractors if they get hurt when helping with your DIY renovation.

If a contractor is injured on-site, the costs should generally be covered by their Worker’s Compensation. However, it is worth confirming any requirements with your insurance provider before renovations commence.

Another type of home insurance for renovation property includes a builder’s risk policy, which covers any damage to your home during construction, such as rain damage or theft of building materials; however, builder contractor’s tools are not covered.

Does square footage affect insurance?

Your homeowners insurance is calculated using a range of factors, including your credit score, claims history, and your property’s location, age, and unique features. The size of your house is an important feature as the larger your home is, the more materials it would require to repair or replace if it was damaged.

Therefore, increasing the square footage will likely increase your insurance premiums as insurers need to spend more to adjust or repair larger properties.

Does my house insurance cover bad workmanship?

Homeowners insurance during renovation will generally cover repairs needed due to accidental contractor damage, but not necessarily the costs to fix poor quality workmanship.

For a poor workmanship issue, you must request the contractor to rectify the problem under their home improvement contractor insurance. As this may be costly and difficult, you should hire a reputable contractor with adequate insurance for renovation projects to avoid potential bad workmanship issues.

How do I know if my house is insurable?

If you own a home with a mortgage or home equity loan attached, you will most likely already have homeowners insurance, as this is a requirement for most lenders. To find out what you may already be covered for, you can contact your insurance company.

Standard homeowners insurance policies will not cover major building work or structural changes, so you should ask your insurer if they will cover this before undertaking the work. For homeowners insurance for homes under renovation, you may be required to pay a higher premium subject to the type and extent of work you have planned. If you wish to renovate or build a new addition to your home, you should contact your insurer before you renovate or remodel a home to confirm they will insure you.

What counts as building work for insurance?

Building work for insurance includes significant construction or adaptation that increases the risk of damage to a house’s existing structure and contents. Standard homeowners insurance does not typically cover substantial building work. Therefore, you should tell your insurance company about your plans to undertake building work before engaging contractors or commencing work.

Due to the significant nature of remodeling work and the potential for workers to get injured, you should ensure you hire reputable contractors with adequate insurance cover. The Insurance Information Institute recommends you ask to see copies of your contractor’s commercial business and general liability insurance policies, in addition to their workers compensation cover.

Can I claim insurance for renovation?

Insurance companies only pay out claims on losses that they have insured for. If you claim for damage caused by a contractor or builder that you didn’t advise your insurer about, it will most likely not be covered. You should inform your insurance company before starting any renovations or building work. It’s crucial to note that while you may be able to take out renovation insurance, the most suitable type and level of cover will be different for every homeowner.

Does insurance pay for upgrades?

Depending on your policy terms, your insurance may pay for upgrades. Building codes change to reflect updated standards, technology advancements, and improved practices in the construction industry.

If your insured property is damaged or ruined, it will be repaired or rebuilt according to current building codes. Your insurer is unlikely to pay for unnecessary builder upgrades; however, your homeowners insurance for homes in need of repair means the materials and structures may be upgraded to comply with current building codes.

Why do I need renovation insurance?

Depending on your particular policy terms, your standard homeowners insurance will cover some renovations. However, you will likely need to increase your dwelling coverage to ensure the replacement value of your home accounts for the value added by the upgrades or remodeling. If you don’t update your homeowners insurance to reflect the increased value of your home, you may be underinsured. Should something go wrong, your insurer will not be able to repair or replace your home to the extent of its actual value.

Additionally, your insurer may also advise you to add the following home renovation insurance products to your existing coverage to protect you against financial loss:

• Dwelling under renovation: protects against the damage or theft of construction materials or the foundational collapse of your home during renovations.
• Vacant home insurance: covers losses and certain damages for an unoccupied home.
• Builders risk: if you’ve purchased a fixer-upper or your home needs a lot of TLC, a builder’s risk policy, as either an add-on to your homeowners insurance or as a standalone policy, will cover the building contents and equipment, including damage and theft.

Summary of insurance for renovations

Insurance for homes under renovation can be confusing and convoluted; however, this should not put your plans to renovate or remodel a home on hold. Renovations and additions are a popular choice to add considerable resale value and visual appeal for potential buyers and increase your appreciation for your home.

Understanding renovation insurance for homeowners and what is covered under home improvement contractor insurance will help ensure you are covered for any potential financial liabilities and have peace of mind if anything goes wrong. When it comes to peace of mind, Richr knows how hard buyers are working to attain homeownership. That’s why they’re offering 2% cash back on home purchases so they can enjoy financial freedom, peacefully.