Homeowners insurance during remodeling and renovations
Before remodeling your home, notify your home insurance company since certain improvements change the value of your home. A remodel could affect your homeowners policy’s coverage limits and may need to be adjusted. Depending on how extensive the renovations are, or if your home is vacant, you might need additional insurance coverage.
Which home renovations may impact the cost of homeowners insurance?
Home renovations may affect your home insurance in several ways. Upgrades, renovations, or additions may increase your home's value and necessitate more coverage and change the cost of your policy. For example, upgrading to a metal or tile roof may result in a higher replacement cost which could increase your premium.
If your HVAC system breaks down due to normal wear and tear, it generally won't be covered by your home insurance policy. However, your homeowners policy may cover fire damage or damage from a tree falling on your home.
If you plan to modify your HVAC system with a major upgrade, such as new ductwork, it's best to let your home insurance company know. You might qualify for a home update discount. You shouldn't need to update your dwelling coverage unless you're also changing your type of HVAC system (for example, moving from an oil-forced-air furnace to a gas-forced-air furnace).
Air conditioner replacement
Air conditioners may be eligible for a replacement if they're damaged or destroyed by a covered loss, such as fire or hail. Your coverage can depend on the type of AC system in your home. Central air systems are part of your home's structure and therefore fall under dwelling coverage. If you have window air conditioner units, they may fall under your personal property coverage. Learn more about how home insurance covers HVAC and air conditioning units.
Attics and basements
With attic and basement renovations, primary concerns may be adding insulation and extending HVAC and electrical systems. Like with any major remodel, you should notify your home insurer to determine if you need to update your dwelling coverage. They may require photos and invoices to make the appropriate adjustments. Learn more about homeowners insurance coverage for basements.
If you have a basement, consider water back-up coverage to help cover damage to your basement or latest renovation in case water discharges from a sump or backs up through sewers or drains.
Hot tubs and swimming pools
Homeowners insurance may cover swimming pools or hot tub damage (usually under your dwelling, personal property, or other structures coverage), as long as a covered loss causes the damage.
If installing a new swimming pool, the Insurance Information Institute recommends raising your home insurance liability limits to $300,000 – $500,000 or more. A separate umbrella policy can also provide protection in an accident or disaster.
Your homeowners insurance dwelling coverage may cover deck replacements under if a covered peril necessitates the replacement. Regardless of your reason for replacing your deck, talk to your insurance company about updating your dwelling limit after the renovation. Adding or replacing a deck can boost your home's value but will require more funds to rebuild if damaged. Keep receipts for labor and materials, note the material types and square footage, and take plenty of photos to help your insurer calculate how much additional coverage you need.
Your policy might cover landscaping, which may help pay to remove damaged trees and replace plants and shrubs if they're damaged by a listed peril. If you plan to make significant improvements to your home's land, talk to your insurer about what might be covered. Insurance companies may limit landscaping coverage to a percentage of your home's dwelling coverage. Learn more about how home insurance may cover landscaping.
Detached garages, sheds, and driveways
Secondary structures such as sheds and detached garages fall under your home insurance policy's other structures coverage. While your insurance won't cover normal wear and tear, it may cover damage caused by a covered loss such as a storm.
If you add a new garage or shed to your property, your insurer might use home replacement cost estimates to calculate how much coverage you'll need. Provide details about the anticipated size, materials, and amenities like electricity or heating. The “other structures” portion of your insurance policy covers most driveways. Learn more about driveway damage and home insurance.
Your home insurer will only pay for a roof replacement if a covered loss causes the damage. Keep in mind that replacing your roof after decades of wear and tear isn't covered by insurance. Check your policy's dwelling coverage to find out more.
When updating your home insurance policy due to a new roof, your premium may decrease. A new roof offers better protection against inclement weather, reducing the chance that you'll need to file a claim related to water leaks. Keep the invoices from your qualified roofing professional and take photos to share with your insurer. Learn more about how home insurance covers roof damage.
Does homeowners insurance cover new additions?
Home additions can't be paid for through your homeowners coverage since home insurance helps to put your property back to pre-loss condition after a covered loss. Adding to your home's floor plan almost always necessitates updates to your homeowners insurance during remodeling. You'll need to raise your dwelling coverage limit to account for the additional square footage. Talk to your insurer ahead of time to get an estimate of how your premium may be affected when the addition is complete.
Homeowners insurance during construction
If you're planning a major remodel like a home addition, you might want to revisit your personal property limit and consider adding coverage to your homeowners insurance during construction. Homes undergoing major home renovations can be targets for criminals, so make sure any belongings in the home are covered. Check with your insurer about coverage for your home while it is under construction.
Also, you may consider increasing your personal liability coverage in case someone gets injured during renovations. Your contractor's commercial insurance policy should cover any injuries their workers suffer. However, a lapse in their coverage could ultimately fall on your shoulders. If you're knocking out an exterior wall or adding a second story, you may even consider purchasing builders risk insurance if you're concerned about the level of coverage provided by your contractor's insurance.
Are DIY projects covered by homeowners insurance?
Most DIY projects won't be paid for by your home insurance policy. However, there may be an exception. If you repair an item that was damaged by a covered peril if you're in the trade or if your work is inspected by a qualified professional your policy might cover that repair. If you aren't confident in your skills, don't be afraid to hire a pro to complete the job. Your insurer could deny your claim if any mistakes or improper DIY work results in damage to your home.