Does Your Insurance Cover Home Remodeling and Renovations?


Remodeling a home, or even part of your home can have some significant advantages in terms of your home value. However, before you actually start your home project, it is important to make sure you are protected. Believe it or not, this is one of the key ways you can save money on your remodel or renovation.

There are a lot of things that can go wrong in this process and it is foolish to think that you will be protected simply because you have home insurance. In fact, there are some things that may not be covered otherwise, so having a conversation with your insurance company is key. Many don’t actually even think about their insurance policies when it comes to remodeling but it should be at the top of your list before you get started to make sure you are covered.

Who You Choose to Do the Renovation Makes a Difference

Before deciding who you want to complete the renovations, you should consider the potential cost risk associated with each. When you add in the insurance calculations for protecting you during this time, the actual cost can vary on who you choose.

Hiring a Contractor

If you are hiring a contractor to do all of the work for you, you will want to take extra steps to prepare for the risk. Not only do you want to have the right amount of coverage in place but you also want to make sure they do. One of the first things you should do is ask for their certificate of insurance.

Their certificate of insurance is insurance that they have for themselves for the work. Once you have this information, you want to make sure that it is valid and that it will cover the job they will be doing for you. Take a close look at the coverage they have because it could mean the difference between a lawsuit or not if there is an injury on site.

One thing you want to look for is contractor’s liability. This will help to protect you in case there is any damage to your property during the process. The last thing you want is to find this damage later and have to spend even more money to fix it.

The next big thing you want to check for is something called builder’s risk. This is especially true if you are having them work on a bigger project. This is a special type of insurance that protects the building where the renovation is being done including equipment and material in case of loss.

Doing It Yourself

If you are choosing to do the project yourself with friends and family, you will want to increase your own liability insurance. This is because if someone gets injured during the process, your insurance can pay for the medical bills that result instead of it coming out of your own pocket. How much you need to increase it can vary so it is best to talk to your insurance company to get the proper amount.

Renovations Increase Home Value

Before you begin your renovations, you should have a detailed plan. It is important to know what you are looking at doing and how it can increase your value. Once you do, you should increase your insurance coverage to protect the replacement value including the new renovation. Many people choose to protect the market value and this is not a proper representation of coverage needed.

Anything you purchase as part of the renovation or at the end of the renovation, including furniture or gym equipment, should be added to your home inventory with your insurance company. This is all part of your coverage and making note of it in your home inventory is a critical component of how much is covered and the coverage you need.

Anytime you make a change to your home, you should review your insurance policy. Otherwise, you could be leaving your home under-insured and you could be in trouble if anything were to happen. You want to make sure that it will be covered moving forward and many people forget this essential step of increasing their insurance coverage.

Wrapping Up

In conclusion, your current home insurance may not have enough coverage in place to protect you if you are planning a renovation or remodel. Before you get started, you should develop your plan and increase your insurance coverage appropriately. After you have completed the renovation or remodel, you should revisit your insurance coverage amount to ensure that everything is now covered with the new upgrades. You should never assume that you are covered before a remodel but a quick check with your insurance company can help you save some money along the way.

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