Homeowners Insurance

How Home Renovations Affect Homeowners Insurance

Have you noticed some areas in your home that need to be renovated? Or maybe your Pinterest boards are finally becoming a reality and your remodel project is starting soon.  Getting some TLC done to your home can be an exciting and stressful thing. While you’re picking out paint samples and new appliances, don’t forget to lookout for potential risks to your home. 

Did you know, there are several key areas that insurance carriers want to know you are taking care of? Things like water heaters and air conditioners have the potential to cause some major damage and turn into big claims on your homeowner’s policy. 

A leaking air conditioner in the attic may come through your ceiling, leading to water damage in your home. A water damage claim on hardwood floors could be a major loss and impact on your home insurance policy. As an underwriter reviews your policy, they will review each claim on your policy and place it into consideration at renewal. Policyholders with minimal claims and that prove considerable effort to reduce risk will receive favorable rates from the carriers. 

Faulty wiring can cause damage to a home and some wiring may not even be accepted in the first place. A change in your wiring could prevent a loss and give you more options with carriers. Some losses may also be declined if the peril was due to an old, faulty wiring system in the home.

Altogether, home maintenance is crucial. It not only affects your home but will also impact your home insurance rates. Ignoring what can seem like a minor issue like leaks or cracks could lead to major structural damage down the road. Catching a potential problem early and having it fixed can save you money on the home maintenance costs and your insurance. 

Shopping for home insurance is getting harder and harder, and premiums continue to rise. As a result, insurance companies are becoming more selective about who they insure. Carriers prefer homeowners with little to no claims and who prove they take the extra steps to limit their risk and exposures. Taking precautionary measures, like maintaining and replacing appliances, can make you more favorable to insurance carriers. 

Popular things to look for can include air conditioning systems, water heaters, electrical wiring, plumbing systems, among other things that could cause damage down the line. There are also smart home appliances and sensors that can be installed to help prevent damage as well. 

When an insurance carrier sees that you have taken extra steps to protect your home and invested in updating equipment, they are incentivized to insure your home. Their interest is in lowering risk and reducing claims. It may be worthwhile to make the replacement of some of this equipment to get a better insurance renewal rate. 

While you are doing these renovations and remodels, some other insurance questions may come up. It is best to ask your insurance agent about any additional coverage you may need to compensate for gaps in coverage. Dwelling Under Renovation Coverage may be available from some carriers and provide additional coverage during times of renovation. Additionally, remodeling that improves the home and increases value could mean you need to raise your home value on your current policy. 

It is always best to talk to your agent when you are making changes to your home, so you never go without the proper coverage. During the shopping process for home insurance, let your agent know about the recent changes you have made to your home, some of them may help get you a lower rate and better coverage. 

Find out more about home renovation projects and things to look for by watching our Home Maintenance Series on YouTube here.