Making home improvements can add to the value of your home. Most people inform their friends and family when they’re renovating; however, your insurance provider should be the first one to know about it. It’s vital to notify your home insurance agent about renovations you make that can impact your home’s value.
In this article we discuss why you need to tell your insurer about your home improvements and how it can affect your coverage.
How Do Home Improvements Affect the Value of Your Home?
Home insurance provides financial security in the event your home suffers a total loss or needs repairs done due to one of the covered damages. Making home improvements will likely increase the value of your home, which means the replacement cost goes up. If you neglect to inform your insurer about these changes, your home may not be fully covered anymore.
For example, if you add a garage to your home and don’t inform your insurer, then you may have to take on some of the replacements costs yourself if a disaster strikes. Your insurer will only cover the costs up to the limit you purchased. Therefore, if the cost to rebuild your home with the new garage is higher than the purchased limit, then you’ll have to cover the rest of the bill.
That’s why it’s important to inform your insurer on any upgrades or renovations you make to your home. Make sure to talk with your agent and reassess your policy and coverage needs. It’s best to be transparent with your agent now in order to avoid headaches later.
What Should You Do?
The best way to avoid any unwanted conflict in the future is to keep things clear and transparent. This is why you should inform the insurance company about your home improvement ideas before making any changes. This way, they can tell you what’s covered under your current insurance policy. You can either adhere to what they say or revise the terms of your agreement to get more coverage after you complete the home improvements. We suggest you inform the insurance company before you:
- Add square footage to your house
- Replace your roof, siding, windows, etc.
- Put in a pool
- Finish your basement
- Build a new structure (garage, shed, guest house, etc.)
- Renovate or upgrade features in your home
- Add a deck
All in all, informing your insurance company about your home improvements only works in your favor. It lets you put your mind at ease that your home is covered in the event of a disaster.