With the growth in construction, it’s no secret that the pandemic has inspired more than a few home improvement projects.
But, what if we told you that these projects did more than improve your attitude towards being at home?
They likely changed the homeowners’ insurance needs.
When you complete home improvement projects, you need to tell more from your family, friends, and social media followers.
Your boldest insurance advisor is actually one of the first people you should tell.
Specifically, you need to tell your insurance advisor about home improvement projects that are likely to add value to your home.
Here are some home improvement projects you should consider discussing with your insurance advisor:
- Remodeling or renovating part of your home
- A project that adds space to your home
- Add deck
- pond digging
- Finish your basement
- Build a new structure (pillar barn, shed, carport, etc.)
- Replacing your roof, siding, windows, or similar exterior feature
- Any project that adds great value to your home
How do home improvement projects affect my home insurance?
The main way that home improvement projects can affect your home security is that they can change the cost of rebuilding your home. This is a big problem. After all, this is the main reason to have an insurance policy for your home: to repair or rebuild your home in the event of a disaster (depending on the coverages purchased).
Insurance companies often provide coverage based in part on the cost of rebuilding your entire home in the event of a loss. Some policies provide coverage based on actual cash value (ACV). The apple cider vinegar depends on the age and condition of the drug at the time the loss occurred.
The cost of rebuilding your home is called replacement cost. When you have a policy that pays on a replacement cost basis, we want to secure the full cost of rebuilding your home. Not necessarily what you might sell, but what it would cost to build new.
Read more: How to choose the best home insurance
Let’s look at an example.
Dominic and Sam buy a house. Two years later, they decided to add a garage. Later that summer, a strong storm blew and a large tree fell on their house.
Unfortunately, Dominic Wissam did not tell the insurance advisor about the garage they built. Therefore, their insurance will likely cover the maximum amount of insurance they have purchased, even if the cost of rebuilding with the garage is higher than that. This may leave them with a portion of that repair bill.
If Dominic and Sam tell their agent about their new garage, their insurance will be adjusted to have enough limits to rebuild their home as it was when the loss occurred.
There are also policy approvals or amendments that cover increased construction costs. This might help in a situation similar to our story above. However, even these approvals may contain provisions that state that you must notify your agent if any set of home improvements will exceed a certain percentage of your home’s replacement cost.
The moral of the story: Tell your insurance advisor about your home improvement projects.
The policy limit you originally set for home insurance may not be high enough after a home improvement project. Your insurance company will only pay the limit shown on your policy. Talking to your insurance advisor to reevaluate your policy can save you a lot of grief and your budget later on.
Major updates can change the way you compensate for a covered loss
There are some situations in which a home improvement project may actually change how we can compensate you in the event of a covered loss. While most homeowners’ policies It has a replacement cost, there may be parts of the home that are insured only for the actual cash value, such as your roof. In the case of roofs, this depends on the age of the roof.
For example, if your deck is 20 years old, it may be insured for actual cash value. However, if you replaced it recently, you may be eligible for a replacement cost on your roof. Telling your insurance advisor about the update helps ensure that your policy is written with the best coverage possible.
It can ensure that the limits of your home insurance policy change
When you purchased home insurance, you set your coverage limits. Boundaries are just what they look like. Your policy will cover a certain amount of damage. The different coverages within your policy have their own limitations.
For example, your personal liability coverage within your home insurance has various limits that you specify at the time of purchase. liability coverage Protects you if someone files a claim against you or another insurer for injury, property damage, or other covered loss.
Therefore, if you add a swimming pool, your insurance advisor may recommend increasing your liability limits due to potential injury risks and having more people in your home for swimming.
If your home improvement project is building a column barn or garage, you may need to increase the coverage limit for other structures.
While these may seem like small adjustments, they can be the difference between having adequate insurance or being underinsured.
Are there other situations that I might need to talk to my insurance advisor about?
Besides major home improvements, there are other reasons to talk to your insurance advisor. Many homebuyers usually think once they buy their home and get insurance, They are finished.
But there are actually a lot of other changes that you may need to discuss with your independent insurance advisor in Boulder to make sure your homeowners insurance policy is up to date.
Examples of these changes may include:
- Changes for those who live in the house
- Changes in the amount of time you spend at home throughout the year
- Upgrade the contents of your home
- Automatic sprinkler system installation
- home security system installation
- adopt a dog
- Start a business from home
Another aspect of your home that may change over time is its contents. It’s a good idea to keep an updated home inventory to document the items in your home. Many free apps can help you capture information quickly.
As your home and family change, tell your insurance advisor. This will help you ensure that you still have the best coverage for your home
This article was provided by car insurancea bolder insurance partner