Your home insurance policy includes a specific type of coverage called "dwelling coverage." The amount of dwelling coverage that you have is based on your overall home value and the approximate cost to rebuild your home in the event of a total loss. When you renovate your home, you may increase its value — and if you don't inform your insurance company, you may be left underinsured.
These are the home improvement projects that could affect your overall value and require you to increase the amount of insurance coverage that you have for your home:
Adding a Pool or Hot Tub
When you decide to install a pool or hot tub in your backyard, you are likely thinking more about the endless days and nights that you will spend relaxing. However, these home improvement projects may increase your home's value — as well as your liability — which may cause an insurance premium increase. It's important to budget for this when you consider the overall cost to install and maintain your new pool or hot tub.
Replacing Your Home Siding
Replacing the siding on your home will have a significant impact on your property's facade. Not only will it boost your curb appeal, but it will also increase the value of your home. The increase in value may be so high that it could leave you without enough insurance coverage in the event of an emergency, so you should inform your insurance company that you are taking on this project.
Upgrading the Kitchen or Bathroom
Kitchen and bathroom renovations offer you the highest return on your investment, as these projects make your home more appealing to potential buyers and can drive up the sale price of your house. Noting the high ROI, it's necessary to keep your insurance company informed when these projects are complete.
Investing in a Home Addition
A home addition, such as a second story or additional living space that changes the footprint of your home, will significantly change the value of your home. This is perhaps the most important project to tell your insurance company about, as you do not want to risk being underinsured after you have finished a beautiful home addition.
In order to fully understand the impact that your home renovation project may have on your homeowner's insurance policy, contact your insurance agent prior to beginning the project. This will give you an idea of the impact that your project will have on your coverage and will allow you to budget for any insurance premium increases that may occur.
About the Author
Carol McCullough Relocation Certified
As a Fairfield resident with a family commuting daily on Metro North, and our children graduating from Fairfield public schools, I look forward to sharing many of the great attractions in a wonderful community and county! Over the past 18 years with Berkshire Hathaway Home Services New England Properties, I have helped hundreds of buyers and sellers compete their home search and close on the sale of their property. As a Certified Relocation Specialist, my production results rank in the top 4% nationally while delivering exceptional customer service to my clients and their welcomed referrals. Real Estate is one of the most exciting investments you can make. It should be a fun and rewarding experience. Confident with your home marketing decisions and comfortable with the home marketing process is my commitment to you! I am excited to share several new marketing strategies successfully implemented in Southern Fairfield County! Regardless if you are looking to buy, or about to list your current home, you will soon BE AT HOME when working with Carol! *Connecticut Magazine 2022 Award Winner- 12th consecutive year scoring highest in overall customer satisfaction.
