Are you planning a major home renovation? There’s a lot on your To-Do list, but there’s one thing you definitely shouldn’t miss. You should inform your insurance company about renovation work you’re doing on your home and make sure that your policy is up-to-date afterward.
The consequences of an out-of-date insurance policy can be devastating if your home is lost or damaged by a fire or flooding. If you’re underinsured, your policy may not provide you with sufficient funds to complete repairs or replace all of your belongings.
If there are complications with your insurance claim, a firm like Virani Law can help you negotiate with your insurer. By staying on top of your policy during renovations, hopefully you can avoid unnecessary problems with your insurer in case of a loss.
There are several reasons to keep your policy up to date:
Renovations Make Your Home More Valuable
The Structure/Dwelling part of your homeowner’s insurance covers the replacement value of your property, not its resale value. However, most renovations will increase the replacement cost, and it may exceed your policy limits. These renovations in particular can put you over your limits:
- Updated fixtures, countertops, cabinetry, flooring, doors, or appliances;
- Building an addition and adding square footage;
- Finishing a basement;
- Replacing your roof – although if you neglect your roof, your insurer can use it as a reason not to cover your claim.
Your Policy Could Be Voided
Renovating your home without telling your insurer can void your policy, which could be an extremely costly mistake to make. Some policies contain a clause that eliminates your coverage if you undertake a home renovation.
You may need to do more than notify your insurer of your plans. The insurer will evaluate your plans, and if there is a substantial upgrade, they will want to increase your coverage limits – and your premiums. In some cases, they might decide that you need more specialized insurance, for example, if you’re building a custom home or renovating a heritage home.
You should also know that if you need to vacate your home during the renovations, that too can void your policy. Letting your insurer know can prevent that from happening.
You Should Have Increased Liability Insurance
Having a construction crew in your home may increase your need for liability insurance. There will be more people on the property, and the risk of injury will be higher. Homeowner’s insurance doesn’t just cover damage to your dwelling and personal contents. It also covers your personal liability in case someone gets injured on your property.
You may only need to get extra insurance during the renovations. Contractors typically take out their own policies, but you don’t necessarily know all the details. They may only cover equipment and materials. You’ll also be facing higher risks of theft and damage to any material or equipment that you own.
You’re better safe than sorry. If you’re planning renovations, get in touch with your insurer.
