Homeowners Insurance Coverage and Home Renovations

There is no definite answer of yes or no in regard to whether or not you need extra coverage during a home renovation. You should definitely tell your insurance agent about your plans and see if any changes are recommended. Depending upon the type of work being done your insurance rates could go up, come down or remain exactly the same. In cases where your premiums go up, it is only to provide adequate coverage during your changes, in case a disaster were to happen and a claim had to be filed. Any time that the value of the home has changed, policies should be updated to reflect the changes.

When Your Premiums Increase With Renovations

Additions or garages added to a home increase the odds of premiums going up slightly. This is to protect the policyholder, so that the changes are covered. If there is no increase to premiums, the changes would not be covered should anything happen to the house.

When Your Premiums Increase With Renovations

The addition of a security system will likely lower your premiums. This applies to updating plumbing, electrical and heating systems. It is logical that replacing a leaky old roof will reduce the risk to your insurance company, thus lowering your premiums.

Renovating Contractors and Insurance

Contractors should have insurance coverage of their own. This coverage protects customers against any accidental damage; for example a worker inadvertently cutting the wrong wall. You may end up paying for damages yourself if you find that the contractor you hired does not have insurance. Every employee of the contractor should be covered by the contractor's insurance policy. Even if one of these employees were to have a severe injury, claims should not be filed against the homeowner's liability insurance.

Liability and Umbrella Coverage

An umbrella insurance policy can provide additional coverage instead of increasing your home insurance rates. These policies are usually applied to standard liability for damages and injuries. For example, an umbrella policy could cover any auto accident fees over and above what the car insurance policy covers; then you could use more of the umbrella policy to pay for injuries of a person who trips in your yard and breaks a leg. It is called an umbrella policy because it offers a wide range of personal liability coverage to cover a variety of circumstances.