Renovating? Protect Your New Space
You’re planning a home renovation this season, huh? You have the plans drawn up, the materials picked out, and the potential paint colors in neat squares on the walls. The next step is your home insurance, right? While updating your home insurance policy probably isn’t a primary concern during a home remodeling or redecoration project, it should be. If you don’t update your policy after altering your home, you could leave your new space unprotected.
Depending on the renovation, you could need to update different parts of your policy. Here are three common types of renovations and how you can use your insurance policy to protect them:
Some of the most popular home improvement projects (bathroom and kitchen additions, for example) involve structural improvements, according to the National Association of Home Builders. Increasing the amount of living space will increase the value of your home. For example, the NAHB estimates that a half bath can increase the value of a home by up to 10.5%, while a full bath can boost it by up to 20%.
That means homeowners completing these projects should take another look at their dwelling coverage – the part of a home insurance policy that protects the structure of a house against fire and perils, such as wind and hail. Your dwelling coverage limit should be set at the amount it would take to rebuild your home if it were destroyed by a covered peril. If the size and value of the home increases, the dwelling coverage limit should increase as well.
Remember this as well about your dwelling coverage limits. Most of the other limits in your policy are set as a percentage of it. Increasing your dwelling coverage will increase the amount of personal property coverage you have. That could come into play if you’re also adding new kitchen appliances, for example.
At any rate, before you begin a renovation project that will add size or value to your home and its contents, contact your home insurance agent to make sure you’re protecting the full value of your improvement in case of fire or natural disaster.
If you’re redecorating by adding collectible art or new furniture, you may need to update your personal property coverage. Standard home insurance policies set strict limits for high value items (art in particular), which can sometimes be as low as $200 for each piece. Your options? You can schedule endorsements to your policy to make sure each high-value item is covered in full, or you can buy a personal articles floater from a company that specializes in those items.
In addition, this is probably the perfect time to compile a home inventory – a list of your home’s contents and their values, including photos, whenever possible. The first benefit of this is that it gives you a running count of the value of your personal possessions, which lets you know if you need to increase your coverage limit. The second benefit – it can make the claims process run much more smoothly in the event of a loss.
Want to add a pool or hot tub to your yard? Take a step back and weigh the risks. Home insurance providers classify pools, hot tubs, jungle gyms, trampolines, and tree houses as risky business since injuries can be easily sustained while using them. In addition, even if an uninvited guest (for example, a neighbor’s child) sustains an injury on your property, you could be held liable for the injuries if you haven’t done enough to keep unwelcomed visitors out.
If you do go ahead with the pool or hot tub, you’ll need to discuss raising your personal liability coverage. Your insurance carrier will likely require you to build a self-locking fence around the pool, as well as comply with other local safety codes. Talk to your agent before starting the project to be sure you are covering all of your bases.
Renovation, remodeling, or redecorating all provide attractive options for homeowners. But before you take the plunge, make sure you consider your home insurance coverage. Some projects could even earn you premium discounts if they include stronger doors, locks, smoke detectors, or security systems. Ensure that your home improvements truly are investments in your future by properly insuring them.
This article was written by Katherine Wood – staff writer for the HomeInsurance.com blog. HomeInsurance.com is an online insurance resource for homeowners and drivers across the country. The HomeInsurance.com blog provides fresh tips and advice on everything home including financing, safety, maintenance and everyday saving.