How Renovations Impact Your Insurance Rates

Not all home improvements affect your homeowners insurance premiums the same way. Some may raise your home’s replacement cost while others may reduce your risk, which can influence your premium in either direction.

Renovations that may increase your premium include:

• Adding a swimming pool or hot tub
• Building a new room, deck or patio
• Finishing a basement
• Installing a home office for business purposes
• Upgrading kitchens or bathrooms with high-end materials

Renovations that may lower your premium include:

• Replacing an aging roof with impact-resistant materials
• Upgrading your electrical, plumbing or HVAC systems
• Installing a monitored security or fire alarm system
• Adding storm shutters
• Reinforcing doors and windows

Your insurer may use your home’s replacement cost to calculate your premiums. A major renovation that goes unreported can leave your property value outdated and your coverage inadequate.

Why Notify Your Insurance Agent?

Your agent needs accurate information to keep your policy aligned with your home’s current condition and value. Some renovations may require a policy endorsement or a separate builders risk insurance policy while work is in progress. Contractors working on your home should carry their own liability insurance; your agent can help you confirm that coverage is in place before work begins.

Staying in communication with your agent throughout the renovation process can financially protect you from unexpected out-of-pocket costs if something goes wrong. Your agent can review your policy limits against your home’s updated value and recommend changes that match your actual exposure.

Get the Right Coverage

Thinking about a renovation? Contact Jerry L. Payne Agency LLC before any work begins. Our agents can review your coverage and recommend endorsements if needed.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.