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What you need to know about homeowner’s insurance during renovations

Not sure what happens to your homeowner’s insurance during renovations? You’re not alone! Whether you’re planning additions or limited changes, it’s important to consider how these changes may affect your insurance.

And they do.

Keep in mind that it’s always in your best interest to keep your insurance company updated to ensure that in the event of a claim you’re completely protected. This could be as simple as making sure you have liability insurance in case one of your contractors suffers an injury on your property.

Renovations could also change the replacement cost of your home, or add elements that add risk (like a fireplace or a pool, for example).

You could save money on insurance, too

The common misconception is that informing your insurance broker about recent updates to your home is going to end up increasing your home insurance premiums. While that’s not unheard of, things could easily go the other way. Let’s not forget that some home improvements can actually lower your rates and help reduce the risks of future claims which ultimately helps manage your premiums too.

Upgrading a home security system, for example, may entitle you to additional discounts. Other changes to your home, such as renovating your roof, windows and doors, may prevent the risk of future weather-related damage from the elements such as wind or water.

Here’s a list of 6 popular home renovations and updates you should always notify your insurance broker about:

  1. Swimming Pools & Trampolines
  2. Updating Your Roof, Windows & Doors
  3. Finishing Your Basement
  4. Remodeling your Kitchen
  5. Decks and Porches
  6. Adding a Bathroom

Do I need insurance for a property being renovated?

Not necessarily, but it’s possible. The reasoning here is that having contractors on your property means you’ll need liability coverage in case they’re injured on your property in that time.

Home insurance policies already come with liability coverage in most cases, too. The difference with renovations is that the risks inherent in your home change:

  1. The home layout itself changes.
  2. More people are coming and going from the property.
  3. Dangerous objects could be exposed, such as nails or wood splinters
  4. Staircase doors might be missing.
  5. Electricity might be disabled temporarily.

None of these things are guaranteed to warrant builder’s risk insurance or even higher rates upon completing the renovations.

It’s just important for your insurance broker to understand how deep the renovations go, letting him or her advise you on how to maintain your coverage and even which additions could improve your rates.

What to look for in builder’s risk insurance

Builders risk insurance usually covers construction projects while new houses or buildings are being completed, but it’s entirely possible that you may need it for a major renovation.

You’ll need to come prepared with this information to get a temporary policy:

  1. How much of the property needs to be covered, and which specific parts of it?
  2. Who will be working on the renovation? Does your contractor have subcontractors that will be working on the premises?
  3. Do your contractors have business interruption insurance to cover off-site losses that might delay materials from arriving to your home?
  4. How long do you expect the renovation to take?

It’s also important to acknowledge that plans can and do change. Contractors find errors, shortcuts, and just regular wear-and-tear on projects all the time.

This can push back your renovation deadlines, so be sure to keep your broker in the loop! They’ll advise you on how to adapt so that you maintain your coverage for as long as you need it. We know that living through the renovation process can be stressful at times for you and your family, but keep your eye on the prize which is providing a safer and more enjoyable home for you and your loved ones.

It’s all about making a house a home—your home.


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