6 Renovations That Can Affect Homeowners Insurance
Planning a home renovation involves fun activities such as designing a new floor plan and picking colors. However, having a conversation with an insurance agent can be crucial. Home renovations can increase your home value meaning your current home insurance coverage is inadequate leaving you vulnerable to losses. While other improvements can help you qualify for lower premiums. Below are six home renovations that could potentially affect your home insurance policy.
1. Getting a New Roof
Installing a new roof can save you money. With a new roof, you do not have to worry about expensive roof repairs or leaks. Other than the above savings a new roof can help cut your home insurance by 10 to 20 percent. The roof is the single most significant factor that can affect your policy. Most insurance companies will offer a significant discount if you use stronger roofing materials that are leak, hail and wind resistant. Before installing the new roof, discuss with the agent so they can explain whether you qualify for a discount. On the other hand, a new roof could increase your property value which means you need more coverage.
Slate Roofing
Insurance companies like the fire resistant qualities that slate bring to the table.
Metal Roofing
Metals roofs are expensive to install, but insurance companies tend to offer the best (lowest) premiums due to the longevity and durability.
Asphalt Roofing (Shingles)
When most people think of roofs for homes, traditional asphalt shingles are what they thing about. Asphalt shingles are less expensive than other materials to install, but insurance companies know that they can be damaged by things like hail.
Wood Roofing
Woof roofs fall in a special category for insurance companies due to the fact that wood can burn. You may be required to perform regular maintenance like applying flame retardant chemicals to maintain coverage.
Clay Tile Roofing
Clay tile is pricey, but can be long lasting. Insurance rates tend to reflect this for parts of the country where clay materials are expected to last for many years.
2. Building a Pool
Building a pool might make your home the most popular in summer, but it also makes it the riskiest in the block. When people are running around the pool having fun, there is a chance of an accident occurring. If a person does get hurt they could hold you responsible for any damages. Which in turn increases your personal liability protection. Your insurance premium will drastically increase after installing a pool. Some insurers will ask you to install a self-locking fence around the pool to reduce the cost of insuring the pool. Your homeowner’s coverage amount will also increase to compensate for the value of the pool.
3. More Living Space
As your family grows, your home needs to grow as well to accommodate your family. You can add living space by either finishing the basement or converting the garage into livable space. Building a new addition such a second story bedroom or expanding the living room increases the square footage of livable space. Hence your insurance has to be altered to account for the value of the new space. If you plan on renting out the new space, you will need landlord coverage.
4. Kitchen and Bathroom Renovations
Most homeowners will turn to the kitchen and the bathroom when they want to upgrade their home. They will turn their kitchen into a chef’s dream and their bathroom into a spa. What most homeowners do not realize is that the upgrades increase their home value. If you install high-quality counter tops, new appliances, and new flooring, ensure your insurance coverage is revised upwards, so you have sufficient coverage in case of an accident. You can also ask your insurance agent if you qualify for a discount if you upgraded the plumbing and electrical wiring. These upgrades reduce the chances of flooding and fires possibly reducing your premium.
5. Adding a Deck
A deck can be the social center of your home especially in summer, but having one installed can affect your insurance policy. Adding a deck can increase your home value, and it can also increase risk especially if it is attached to the second story. You should have your insurance policy revised after adding a deck because it increases your property value and your current insurance policy might not be sufficient to cover the loss in case of an accident. Your property value goes up and so does your coverage, meaning you have to pay higher premiums.
6. Adding Home Office or Business Space
If you create space in your home for a business, you may need to update your coverage. Your existing homeowner's policy may have some limited coverage for equipment related to a home based business. If you have equipment that is worth more than a few thousand dollars, you will need additional/separate coverage. If you have customers or clients that come to your home, then you'll need to look into separate coverage to cover any liability while they are on your property.
Understanding Home Office Tax Deductions
If you are considering having some work done in your home, talk to a qualified insurance agent first to help you understand how the renovations affect your insurance policy. They will help you make the most of your discounts while still ensuring your home is adequately insured.
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