Home renovations start as dreams, then become plans, then budgets, a major project happens, and then your home is closer to your dream. But one thing often overlooked in the planning stages is how a home remodel can affect your homeowners insurance—namely, your premiums and what’s covered. There are three primary ways that home renovations and homeowners insurance interact. Let’s go over them below.

Home Renovations May Increase Home Value

The most likely outcome of a home renovation is an increase in your home’s value. This is great when viewing your home as an asset, but that asset needs to be properly protected. As such, your coverage and limits may need to be expanded when:

• Adding a room or finishing a basement.
• Renovating a bathroom or kitchen.
• Replacing your home’s siding.
• Installing solar panels on your roof.

These may call for higher premiums to cover the cost of replacing new or improved materials under your homeowners insurance for the home itself (dwelling coverage). Always consult with your agent after making such home improvements.

Home Remodeling That Increase Liabilities

Certain home projects can increase liabilities by adding additional risks to your home. Examples include ones that can pose additional hazards, such as adding a swimming pool. This is a type of “attractive nuisance,” which may require deeper liability coverage. Other renovations, such as a home office or workshop for a small business, can bring additional risks or property that would not be covered as the assets within would be business liabilities, not homeowners.

Home Improvements That Decrease Liabilities

Of course, the opposite is true too: there are certain home remodeling projects that can decrease your liabilities, which can reduce the cost of homeowners insurance premiums. Examples include:

• Replacing an Older Roof: One of the largest impacts is replacing an aging roof, including storm or fire resistance, if your area is at risk of those events.
• Upgrading Aging Systems: Modernizing the wiring or pipework in your home lowers the risks of failures. Same for replacing an aging HVAC/furnace.
• Storm Resistant Renovations: Storm shutters, impact-resistant windows, the above-mentioned roof upgrades, and more can lower the risk of storm and hurricane damage.
• Security & Smart Systems: Systems that help minimize risk in your home may make you eligible for policy credits or discounts. This includes fire-suppression systems like sprinklers.

If you’re using contractors, it also pays to make sure they’ve got the right insurance, including personal liability, workers compensation, and property damage coverage. If you’re having friends or family help out, make sure you’ve got liability coverage yourself if accidents happen.

At the Safeside Insurance Agency, it’s been our goal for the last 30 years to help homeowners in Worcester County and the greater Massachusetts area get the right coverage for the right price, making sure their homeowners insurance is customized for their unique situation. So, whether you’re doing a small project or a full remodel, reach out to us to learn about better coverage. To learn more about us and how we can help, contact us online or call us at (508) 753-8862.