There are any number of reasons that you might choose to renovate your home. However, no matter the reason – from expanding your living space to performing necessary updates – renovations can impact your Homeowners Insurance.

Let’s look at why your Homeowners Insurance is less than ideal when it comes to protecting your house during a renovation. And, if your Homeowners Insurance doesn’t give you the coverage you need over the course of construction, what can you?

Let’s find out.

What is Homeowners Insurance?

Homeowners Insurance is a type of property insurance that will cover your home’s value in the case of any losses and damages to it. It also protects your home’s contents and provides coverage in the case of any accidents in your home or on your property. However, most Homeowners Insurance policies only cover completed structures.

Many people buy a home with the express purpose of fixing it up and renovating it. Furthermore, renovations are often essential to ensure your continued comfort in your home. This means that for the duration that your home is under renovation – and is classified as an incomplete structure – you will need to consider another way of insuring your property. If you’re planning to renovate your home, whether minor or structural, it’s highly recommended to read this article about Renovations Insurance and you will be off to a great start!

How do you insure a home that is under renovation?

There are two major ways in which you can protect your home when it is under renovation:

⦁ Revisit your homeowner’s insurance policy:
It is not common, but some policies do cover homes that are under renovation or offer the option of additional coverage. Does yours?

However, the primary reason this is the less common option is that Homeowners Insurance will usually only cover a home under insurance if renovations are being performed by amateurs instead of by licensed contractors. Furthermore, it will only protect your home and not additional materials.

Apply for Builder’s Risk insurance:

This type of insurance will cover the physical structure of your home in the case of damage to it. It will also provide coverage for the tools, materials, and other items involved in the renovation process, as well as temporary structures built during the renovation, scaffolding, and more. Additional coverage (extensions) provide protection in the case of wind damage, earthquakes, flooding, etc.

If you’re looking to insure your home with Builder’s Risk insurance, you should first check your contract with your home builder or contractor. This lays out which of you is responsible for getting the insurance. In order to protect your investment, you must be sure that you are insured.

What about once renovations are complete?

Once renovations are complete, you may need to revisit your Homeowners Insurance. This is because renovations often alter either the value or the risk (or both!) associated with your home. This can, in turn, change your insurance premiums.

Some common renovations that can result in changes to your insurance premiums and policy include:

Building a pool: This increases both the value of your home, as well as the risk associated with it, leading to a relational increase in your premiums.
Extending your home: Expanding your home’s living space involves increasing the total square footage of the house. Your existing homeowners insurance may not be adequate enough to consider this extension and may need to be revisited.
Renovating your roof: A new roof reduces the risk of weather damage to your home and can lower insurance premiums.

Protect your investment with the right insurance policies

Your Homeowners Insurance changes during the process of renovation. It may not provide coverage during the construction. Your policy also changes after your renovation. It should be extended to include the value of the changes and additions to your property. It is essential that your policy is adjusted, even if it means a higher premium. If you are underinsured, your insurance company can choose to void the policy.

Underinsured or underinsured – both of these scenarios can be devastating to any homeowner. Consult with your insurance company before you begin your renovation to avoid a messy situation.

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