Any upgrade that affects your home’s value or liability exposure during and after renovation will impact your homeowners insurance coverage. This article discusses the insurance implications of renovating your already covered property and the measures you should take to avoid creating coverage gaps.
Renovations that Can Impact Your Home Insurance
Your residential property upgrades may affect your home insurance coverage in situations such as:
● DIY Renovations–
If you have the expertise to execute the renovations yourself, will you also have friends or family members helping with the DIY project? It’s important to ensure you have enough homeowners insurance for home renovations, especially liability coverage. If a friend or relative is injured while helping out, they could sue you for damages.
You can protect yourself against such liability by increasing the no-fault medical coverage on your homeowners policy. Having the extra protection allows anyone injured while helping with your DIY home renovations to file their medical claims with your insurance. Also, the additional coverage minimizes the risk of you being sued by the injured person.
● Renovations By a Contractor–
You’ll also want to check that the involvement of a paid contractor in the project doesn’t expose you to any liability lawsuit. Remember that the contractor will come with employees that may get injured on the job. Their employer—your contractor—should be properly insured for you to be safe.
Specifically, the construction company should have liability insurance and workers’ compensation protection, and they should provide proof of coverage on request. Any subcontractors taking part in the project, such as electricians or plumbing contractors, must also prove that they have the necessary injury and property damage liability policies.
● Personal Property Upgrades–
Have you bought any new artwork or other expensive possessions? If you need any new acquisitions replaced by homeowners insurance when a covered peril occurs, you may need to include those in the personal property component of your policy. However, separate coverage, such as a floater or an endorsement, may be necessary to insure any expensive items you recently bought.
● Liabilities After Adding Detached Structures–
Building an in-ground pool or hot tub comes with the risk of liability lawsuits in the event of accidents, such as drowning. You could expand your overall liability coverage by purchasing an umbrella liability policy.
Home Improvement: Steps to Take to Protect Yourself with Homeowners Insurance
Do the following to ensure adequate insurance protection during and after renovating your home:
• Notify Your Agent–
Once your home’s value has increased, your pre-upgrade homeowners insurance coverage may be lower than the cost of replacing or repairing the property after a covered loss has occurred. You also need to consider any additional liabilities you’re exposed to as the project is underway and after you’re done renovating. Your insurance agent can look at all these changes and advise whether you need to increase your coverage limits to fully protect yourself.
• Keep Renovation Records–
You need your upgraded home insured for its full replacement value, and your insurer will require proof of any upgrades. Therefore, you must have on-hand copies of any contracts and receipts for construction materials bought for the home improvement project. It will also help with the assessment of your homeowners insurance needs if you document your property’s transformation from the outset. For example, take pictures of your home before, during, and after all the renovation work.
If you’re considering renovations that can impact your home insurance coverage, you’ll want to notify your agent. Contact the experts at Burton A. Harris Insurance Agency today for help getting the necessary insurance coverage for your home improvement project in California. Together, we’ll review your existing policy and help address any coverage gaps.