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How Remodeling Your Home Will Affect Your Homeowners Insurance

People remodel their homes for many different reasons. Some need an expansion but don't want to lose their mortgage rate by moving, according to the Hartford Courant. Other renovations are necessary, such as after a storm or simply due to old age.

Regardless of the reason, remodels of all kinds are likely to affect home insurance. Some renovations, like a new roof, will affect your insurance positively while building a pool can actually hurt your insurance rates. Before hiring a contractor or tearing down walls, the best thing to do is to talk to your insurance agent.

Home insurance before construction
Some homebuyers purchase an inexpensive home with the intention of fixing it up. This can be a cost-effective way of buying the ideal home. It offers the homeowner the chance to completely personalize his or her new living space.

However, insuring a home that is in rough shape can be difficult. U.S. News & World Report noted there are several different types of insurance that match homes with varying needs of renovation. A house that requires small, quick repairs will do well with conventional insurance. Old homes, vacant homes or homes that will be under construction for a long time all have different options for insurance.

"Insuring a home that is in rough shape can be difficult."

Once renovations are complete, homeowners can switch to a traditional home insurance plan. Chances are, it'll be much easier to insure once the repairs are finished.

Coverage during construction
Filling your home with people to work on a room will increase the risk of someone getting hurt on your property. If a contractor is going to do the majority of the work, the company's insurance should cover injuries, according to 360 Financial Literacy. However, if you and a team of friends are taking on the project, homeowners insurance might cover it. It's best to check with your insurance agent to find out.

Contractors bring expensive tools and supplies with them. In the mess of getting rid of the old walls or structures and installing the new ones, the chance of theft increases. Homeowners insurance might also cover these losses, according to 360 Financial Literacy.

In most cases, a renovation will add value to your home. This value should be reflected in your homeowners insurance policy before the renovation has started. This way, if something should happen and the improvements are damaged during construction, they will be covered.

Covering the changes
When it comes to additions, NASDAQ noted homeowners should call their insurance provider to tell them about the addition. Knowing the new square footage will help to estimate how much home insurance rates will rise.

Bringing expensive items into a home could be cause to expand your insurance's coverage. In most cases, homeowners insurance will cover expensive furniture, but only to a certain amount. Adding more value to a room through furniture or art might exceed that limit.

Contractors' items are at risk for theft during construction.
Contractors will bring tools and supplies into your home. Find out if your home insurance will cover the theft of these items.

Increases and decreases to rates
Any home renovation is valuable to the homeowner. In most cases, the insurance provider agrees. However, there are some renovations providers don't like. Pools are one of these.

Pools increase the risk of someone getting hurt on your property, according to Zillow. This risk will be reflected in your home insurance plan. Many times, insurance providers will also require a fence or other safety features to keep people out of the pool.

On the other hand, there are some renovations that insurers encourage homeowners to get. For instance, according to the Family Handyman, some insurance providers will even offer discounts on more durable roofing materials.

Renovating your home will generally add value to your property. It's important to make sure that added value is covered in your homeowners insurance policy. Check out home insurance rates on CoverHound's website to find the best policy for you and your home.

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