Does homeowners insurance cover home renovation projects?
Updated: Aug 4
There are a lot of things you usually do before kicking off a home renovation project. Whether you're planning a home addition or want to improve your existing space. Then, there's the whole process of setting a budget, vetting contractors and securing the necessary permits.
But what about homeowners insurance? Does reaching out to your agent even cross your mind as you plan a home improvement project? Because it should.
Why should you notify your agent?
You may run a risk if the limits on your homeowners insurance policy aren't high enough to cover the increase in your home's value after a home renovation. If something happens to your home and you need to rebuild it, you'll want to know that your policy provides sufficient coverage. Be sure to tell your agent about improvements you make to your home and ask if you should increase your coverage limits.
What policy changes should you make?
Before construction begins, you may want to ask your agent whether your existing homeowners policy should be updated, says the III. Insurance Journal says that it often makes sense to incrementally increase your coverage limits as the project progresses.
If it's a major project — you're adding on a new room, for instance — you may also want to specifically list the addition on your policy.
What if it's a DIY Job?
If you plan on a do-it-yourself project and expect to have friends or family lending a hand, you should also check that your own liability coverage is up to snuff.
While it may be hard to believe, you may still run the risk of a lawsuit if a friend or family member who doesn't live with you is injured while helping out. That's why you should raise the amount of no-fault medical protection on your homeowners policy.
With this coverage, if someone gets injured, they can directly submit medical bills to your insurance, which may lessen the likelihood of you being sued.
Finally, as with any big project, organization is key. Keep copies of any contracts and receipts for materials purchased for the home renovation project. And take photos before, during and after the remodeling so you have a visual record of all the work.
Taking the time to do all this may add a few steps to your remodeling project. But having documentation and sufficient homeowners insurance coverage in place may help protect you against the many perils that even the smallest home renovation project might face.
AZ Insurance Team 480-535-5709 https://www.azinsuranceteam.com
*All policies are a little different and this may not be applicable to your insurance policy, talk to your agent to see what your policy covers.*