A renovation project can breathe new life into your home and dramatically bump up your property value. However, it can also alter your insurance needs, which many homeowners don’t discover until they try to file a claim. Below are a few ways improvements can impact your home insurance policies.

How Renovations Can Impact Your Insurance Needs

Increased Property Values

Higher property values are often a pleasant side effect of improving your home. However, those additions may not be covered by your existing insurance policy. If your home is completely destroyed in a covered event, your insurance company may only compensate you for the costs of rebuilding your house as it was before the renovations.

Before undertaking any major remodeling project, talk to your insurance company. Extending your policy limits before you start ensures you have the coverage to completely rebuild after a disaster.

Lower Premiums

Home insurance prices are based on the risk that you’ll need to file a claim. This gives you some control over your premium prices, as anything you do to make your home safer could lower your coverage costs.

For instance, flame-retardant roofing materials can dramatically reduce the chances of a fire, potentially saving you hundreds of dollars per year. Replacing outdated HVAC equipment or installing a security system can also reduce your home insurance costs.

Higher Risk

Some improvements, on the other hand, actually increase the risk of accidents, injuries, or damage. Installing a swimming pool could be a lifelong dream, but it does come with the risk of someone being injured on your property. Most insurance companies charge higher premiums to offset the higher risk of paying a liability claim.

Most home insurance policies specifically exclude business activities, so adding a home office could also increase your rates. You may need to purchase an additional ride to cover inventory stored at your home or the risk of customers being injured on your property.

Since 1987, Goggans Insurance has been helping homeowners throughout Alabama and Jasper, TN, protect their most valuable investments. With offices in Fort Payne, Rainsville, Centre, and Scottsboro, they have a longstanding reputation as one of the region’s most trusted insurance agencies. Visit their website for more on their home insurance options, or call (256) 845-7777 to request a free quote today.