Have you lately started brooding on renovating your home? Might be adding an additional fireplace or that roof-top garden you’ve always cherished. What about transforming your dull bedroom into a master suite of your dreams? Dreaming about all these are always amicable and satisfying. However, in reality, most of the time renovating your home isn’t always a rosy experience. Indeed, sometimes home renovations bring in headaches and raise your home insurance premiums.
If you are seriously thinking about renovating your home, you should contact your home insurance provider before the construction begins. This would help you keep your property fortified during the renovation procedure.
You might be thinking if renovations really increase home insurance premiums. If does since renovations make things bigger, better or riskier.
Bigger: Most of the time, home renovations involve unabridged expansion of a home’s area. An increase in your home’s total area means that the replacement of your home will also go up, which has a direct effect on your home insurance premiums. What if you don’t inform your insurance provider about the same? In that case, the added floor (sometimes the entire property) wouldn’t be covered in case there is a loss.
If you renovate and start an office from within your home, you would require more to pay in insurance than anything else. Besides the square footage, you’d need to purchase additional business insurance to run a home-based business. If you don’t have a liability coverage for your home based business, your office and the equipments like the computer, printers, furniture, accessories, etc. aren’t protected in case anything unfortunate happens.
Better: If your home renovation involves any kind of upgrades, you’ll call for some extra insurance premiums. If you remodel your bathroom, you’ll be adding brand new tubs, wall-mounted cabinets, medicine cabinets, vanities, etc. These items inside your bathroom are definitely going to increase the overall value of your home by thousands of dollars, which means you’d need more insurance.
Contents coverage is such an add on that protects all your possessions inside your home. It includes electric appliances, furniture, clothing, etc. If your home suffers any mishap, you’ll only get coverage for the list of contents you’ve already submitted with the carrier. So if you don’t inform your insurance provider about the additional contents in your home or the upgrades, you’ll be in trouble in the event of a loss.
Riskier: Insurers simply treat some home renovations as ‘high-risk’. Swimming pools are something that fall in this category. According to the Consumer Product Safety Commission (CPSC), during the tenure 2010 - 2012, an average of 5,100 pool related injuries in children younger than 15 were treated. Again, 390 pool and spa related deaths were reported during the same period. This conveys that swimming pools are pretty dangerous and risky. So you need to pay more in premiums in order to bear this extra liability.
Even if you aren’t installing a pool in your home, doing home renovation is itself pretty risky. Simply having workers working with power tools, climbing ladders and putting themselves in many other perilous positions increase liability risk. So make sure the contractor has sufficient insurance to cover the workers in case any trouble arises.
All said in the article might carry the message that home renovations are ugly. No, they aren’t! They increase the sale value of your home and take your lifestyle high up. Nevertheless, don’t forget to keep the insurance related stuffs in mind. A bit knowledge and going by the rules will help you stay away from troubles.
