Home Renovations: Do I Need To Notify My Insurer?

Dec 16, 2022 | Personal Insurance

Standard Practice

Some just want to make some upgrades to make their house look more pleasant. And, some are just doing it to fix their house to make them look new. You must follow all the necessary steps to ensure that there will be no future problems. Today, we will talk about home renovation.

So to the question, do you need to notify your home insurance company for the upgrade for home renovation? The answer is YES! You must contact your insurance agent, company representative, or broker before you make any changes to your house. You should have all the coverage that you need during and after the renovation. Because if you make the renovation before consulting it, you may end up underinsured if something bad happens because of the upgrade.

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Processes and Procedures

To better understand the process and steps to follow, here are things that you need to keep in mind: 

Talk to all the important people that can protect your asset

Your insurance agent, broker, or company representative can help you when it comes to changes like this. Hence, always, let them know your plans like renovations. It is because they are the ones who will tell you if you need other types of insurance for your policy to protect you financially during and after the renovation process.

For a massive upgrade, you should get a builder’s risk policy

Or course of action policy added to your account 

Some insurance companies have this as an add on and some offer it as a stand-alone. The ‘’ course of action ‘’ policy can protect your home from damage during construction and renovation. It covers damages due to rain, wind, and theft of materials like wood, tiles, cement, and mirrors. However, anything that was stolen that doesn’t belong to you is not covered. For example, renovation equipment owned by contractors or workers. Also, vandalism is not part of the insurance policy.

Ask for a copy of the contractor’s insurance policy

The contractor that will do the renovations must have an insurance policy and worker’s compensation. And, as well as commercial business/general liability insurance. Here are the reasons, during the renovation process, having an accident is inevitable. If any workers obtain injuries while doing the upgrade in your house, they must be part of the insurance so that you can avoid lawsuits. If ever the contractor is unable to provide any copy of the insurance policy, just look for a new contractor to avoid unnecessary problems in the future.

Add Vacant Home Insurance to your policy

Renovations can be massive or small depending on what you want to achieve. For small renovations like an additional bathtub, you can have that change while still living in your home. But for major renovations like changing the overall ceiling and flooring, an extension of the living room and dining room, and any other big changes, living temporarily in a different house is a must. Therefore, you should purchase vacant home insurance. This will protect your house in case of any damage while you are away. 

You can also make Do-It-Yourself renovations

Many homeowners are into DIY especially nowadays. You can search for everything now online. You can easily follow a quick step-by-step online tutorial on Youtube. That is why most homeowners just do it by themselves instead of paying a contractor. Especially if the upgrade is just a minor change. So if you happen to be one of these owners who prefer to DIY, you need to make sure to have enough liability coverage in case an accident happens during the process of renovation.

For example, you ask your brother and his friends to help you with the renovation of your kitchen countertop. Unfortunately, your brother’s friend got injured by a hammer during the process of renovation. If you have sufficient liability coverage, the medical bills of the injured will be covered. And if worse comes to worst that he files a lawsuit against you, that will be covered as well. 

Make detailed documentation of the upgrade

Documenting the renovation is vital to ensure that you will be able to calculate the total amount used. You must keep the receipts for the whole job. As well as the receipts of the materials, and the contracts of the contractors. Also, taking pictures of each item and keeping them together with the receipts is advisable.

Why is insurance necessary? Due to the unexpected nature of life! Avoid being caught without defense. The moment has come to ensure your family’s safety. It’s time to consult an insurance professional.

Update Your Insurance Coverage

Once the renovation is done, make sure that you will update your insurance coverage as soon as possible. This is because the value of your house will go up after the changes. The amount needed to rebuild your house from the ground in case of a total loss claim is now higher than the initial amount you insured it. Therefore, be prepared with all the information needed in adding coverage to your policy like receipts to your insurance company, records, and lists that can help calculate the new value that must be added to your insurance.

Consider adding more Liability Protection

If the renovation of your house consists of adding a new swimming pool, jacuzzi, hot tub, or playground, then you must consider adding more liability protection to your home insurance. It is because these are considered attractive nuisances and can cause you a lawsuit if things go south during parties or just when you have some visitors. You may think that you don’t need additional coverage since you never have encountered an accident before during parties. But these accident-prone attractions can cause you trouble and be underinsured is the last thing you surely want to happen. 

Additional coverage for your Personal Possessions is a must 

The renovation includes a lot of buying from left to right. A new look to your living room will not be completed without a main piece of decor like paintings, jars, furs, or chandeliers. So if you happen to buy more expensive stuff in your house after the renovation, additional coverage for your personal possessions is a must. It is best if you consult it with your insurance agent so they can give you the best option like adding an endorsement or floater that will serve as an individual policy for over-the-top items and can provide much higher insurance coverage to ensure your expensive stuff. 

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Construction Material Coverage and Foundation Collapse Coverage 

Consider adding these to your policy before the renovation takes place. Truly that we can never know when an accident can happen. Hence, it is always best to be prepared for anything that could go wrong. Construction materials coverage protects any materials you have purchased whether the materials are just on their way to your house or already there on your property. For example, if the materials got damaged while being transported to your house, that will be covered. Also, if the materials were stolen while stored inside your property, that should be covered too by your policy. 

On the other hand, the foundation collapse coverage is a protection against sudden damage during construction. Let’s say you want to have your living room renovated but during the process, the whole wall collapses all of a sudden. This kind of incident will be covered if you have this policy added to your home insurance before the renovation starts. 

Ask your insurance agent about discounts for Home Insurance intended for Home Renovation

Having some renovations in your house can also save you money if you get qualified for discounts due to the changes that you made. For example, you added safety features in your houses such as smoke detectors, dead-bolt locks, and fire and burglar alarms. Some companies cut their customer’s premiums as much as 15-20% if proven that these safety measures are added to your house after the renovation. Moreover, if you upgraded your electrical system,

plumbing, or heating system, your insurance company may lessen your premiums because these changes can reduce the risk of water damage or fire. 

A new roof can also give you more discounts than you think. Yes, a new roof may not sound so exciting to renovate but you can get some extra cash out of it. Especially in hurricane-prone and hail-prone areas. Although most insurance companies cover roofs, some insurers have depreciation schedules based on the age of the roof. This is for them to determine how much protection you should be getting. And just like any other insurance rules, of course, the newer the roof, the higher the amount your insured will give you to replace it. 

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Business and home combined 

Nowadays, more and more businesses are closing due to the pandemic. That is why many business owners are looking for options to keep their source of income and stay safe at the same time. That being said, having your business in your home can be a good idea. Generally, homeowners policy protects equipment for home-based businesses for up to $2,500. But that amount may not be enough to cover businesses that use big machinery or equipment and bulks of supplies stored in your home. For these types of businesses, you need an additional business policy to insure these items.

Call us today about Home Insurance for Home Renovation!

To know more about what insurance best fits your needs, contact us, and don’t forget to sign up for our free RCE evaluation! Our team here in Denver, CO will provide you with the information that you need to ensure your investment’s safety.

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