3 Reasons to Consult Your Insurer Before a Major Home Remodel

by Jeff IllJune 8, 2016

As the months grow warmer, it’s no surprise that many homeowners embark on those long coveted—and often long postponed—home remodeling projects. Whether it’s improving the ergonomics of the kitchen, updating the bathroom with spa-like amenities, or adding a balcony to the master bedroom, there is much to consider. Everything from budgetary needs to finding the right contractor for the job to rendering a viable design—not to mention the actual construction process—requires planning. From start to finish, you can usually plan on a commitment of a couple months, at least.

But with all that excitement and anxiety percolating, sometimes one critical item on the list gets overlooked: notifying your homeowners insurance company.

With so much at stake, it’s important to have a veritable safety net in case any steps along the way suddenly fall through. Keeping your home insurance company in the know is vital to ensure that your home, liability and family’s financial future are adequately protected.

Image of paper figures to give conception of insurance

1. Protecting Your Home

It’s imperative that you contact your insurer before construction begins to determine a policy coverage limit that accounts for new changes to the home. Failing to let your insurer know of the remodeling project before its completion could have dire consequences. For instance, if you don’t increase your policy limits and your new mother-in-law suite is suddenly leveled by an uprooted tree, the cost to repair or rebuild the damaged portion could fall on you—a hefty toll on your wallet and mother-dearest, to say the least.

Additionally, you want to be covered in case any building supplies like carpeting, floor tiles, paint or lumber are stolen or vandalized during the construction process. And it’s best to know you’re protected before the supplies are shipped to your premises (and, of course, before that woebegone moment they’ve suddenly vanished).

Remember, home renovation projects often mean added square footage and new architectural features—both of which are likely to increase your home’s value. Therefore, once the project is completed, make sure your homeowners insurance coverage accurately reflects the new replacement value of the home. Coverage should also extend to newly purchased items that were a part of the home remodel, such as electronic equipment or home furnishings.

Furthermore, always keep your insurance company abreast of the progress of the project in case details change, mishaps occur or a new coverage limit is required.

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2. Protecting Your Liability

There’s far more at stake than that hard work and expense being rendered all for naught. Home remodeling projects entail a host of injury risks for which you could be held legally liable if there isn’t proper coverage. That’s why it’s crucial to find out if your contractor carries workers’ compensation coverage—and make sure you ask to see his or her actual certificate.

And while you’re at it, find out if the contractor carries a certificate for contractor’s liability insurance. This type of coverage may protect you against any peripheral damage during construction that is unrelated to the project at hand.

Bear in mind, even if the general contractor—not to mention any subcontractors involved—carries coverage, it still might not suffice in the way of the size and scale of your project.

No matter what, it’s worth consulting your insurer to gauge whether your policy limits need a boost for requisite coverage. After all, it’s not uncommon for injured workers to file a claim against the general contractor or homeowner. What’s more, there’s a greater chance of injury for anyone in proximity to the construction site—be it your friends, family or neighbors.

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3. Protecting Your Savings

With all this talk about increasing coverage and increasing insurance rates surrounding your project, there are also some great opportunities to save on your homeowners policy with your intended renovation. For example, if you plan on replacing your old, worn-out roof, consider consulting your insurer, as they can help recommend weather-resistant roofing material to withstand hail, water damage or falling objects. Because a roof upgrade could mitigate the risk of damage to your home, you may see your insurance premium go down.

Likewise, any upgrades to the home’s electrical or plumbing system as a result of your renovation may help reduce your chances of suffering a loss. In fact, water damage and fires are the two most common causes of household insurance claims and often stem from frailties within the home itself—like leaky pipes or an outdated electrical system.

Another upgrade growing in popularity among homeowners is home monitoring systems. With innovations in technology, monitoring systems can effectively detect telltale signs of fire and water damage as well as home invasions. Such systems are generally capable of alerting local fire and police departments, in addition to automatically shutting off the water valve if a pipe suddenly bursts—and keeping your insurance company in the know with these upgrades could help you save substantially on your home insurance.

So what does this mean for you and your home overall? It means that there is far more to lose (and potentially miss out on) by not consulting your homeowners insurance company when you finally decide to convert your basement into a game room or add a second-story bedroom for a new member of the family.

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About The Author
Jeff Ill
Jeffrey Ill serves as Vice President of Homeowners Products at Esurance. As a veteran of the insurance industry, Jeff has held various leadership roles and has supported a wide range of product implementations. His 30+ years of experience have helped him to draw insights for his writing.

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