Renovations are a great way to build value in your home. This can involve exciting activities such as designing a floor plan or deciding on a color scheme. This can really make your house feel like a home. However, it’s so easy to get caught up with decisions and planning that having a conversation with your insurance company may slip your mind.

There are specific renovations that greatly affect the value of your home and increase the cost of your homeowner’s insurance, while other projects may not have that big of an effect. That’s why it is extremely important to always keep your insurance company in the loop when making decisions about your home. Here’s what to expect when planning for the following home renovations.

Adding square footage to your home

A common home renovation is to increase the square footage of livable space of the home. There are so many compelling reasons to take on this project. For example, your home may need to grow to accommodate an expanding family. If you’re increasing your home’s finished footprint, you’re likely increasing its replacement value, or the cost to repair or replace the property. This means that your homeowner’s insurance could increase in accordance with the new livable square footage of your addition.

For example, if you’re mulling over ideas for remodeling your basement, be aware that you will need to increase your insurance coverage. Basements tend to be a scary space to remodel for homeowners, but they don’t need to stay that way! They can be remodeled and finished so that they not only merge with the rest of your home but become valuable assets to your property as well. Whether you would like to use it for an additional living space, a playroom for the kids, or an at-home office, you are adding quality value in space that can benefit your family for years to come. And don’t forget, your insurance will need to be updated to reflect the value of this new space!

Setting up new outdoor activities

Making amazing memories with your family doesn’t need to include plane rides or tropical resorts. In fact, most of life’s best memories are made simply and stress-free — and many times in your own backyard. Exciting outdoor features such as a swimming pool or a trampoline can be great fun and serve as an outlet for bonding time with your family.

However, it’s important to proceed with caution in certain locations as they may have financial consequences. Both trampolines and swimming pools are considered “attractive nuisances,” which is an item that attracts the attention of children while also posing a safety risk. When you own an attractive nuisance, it is expected that you take reasonable precautions to secure them. If you do not, you will be held responsible for any injuries that occur, even if you were not on the premises when the incident took place. Owning these items increases your liability risk, which will in turn increase your home insurance rates.

Typically, a general home insurance policy includes liability coverage. It’s considered “third-party coverage” because it covers others’ injuries or damages that were caused on your behalf. Though it doesn’t cover your injuries, it will protect you from being responsible for others’ medical bills if there is an incident. Due to these risks, your insurer may recommend that you have higher liability coverage than what is standard.

Renovating a kitchen or bathroom

Kitchen and bathroom renovations are a great and popular way to spruce up your home. But, renovating the kitchen or bathrooms can be challenging to navigate. Whether you’re looking to add more space, create a better aesthetic, or improve the functionality of your home, remodeling can do a lot for you and your family. For example, a carefully designed kitchen renovation will make your cooking and baking processes easier and more enjoyable and a good bathroom remodel will create a sanctuary for relaxation and privacy. Even by only altering layouts and fixtures, your home can turn into a space that allows for more purpose and tranquility.

Remember, if you’re making any changes to your home, you should keep your insurer up to date. Making sure you’re properly insured will allow you to go through the renovation process without the hassle and ensure the proper coverage as you take on new liabilities during the project. If you’re upgrading your electrical or plumbing while renovating a kitchen or bathroom, you may be eligible for a discount. All in all, talking to a professional and understanding your homeowner’s policy will benefit you and your home in the long run.

Upgrading the exterior for safety

Taking care of the outside of your home is just as important as updates to the inside. There are several renovation projects that can be done on the exterior to make it safer and more cost-efficient. If you’re planning on making any exterior upgrades to your home, especially in the name of safety, you may start to see lower home insurance rates after you and your insurance agent evaluate your plans. Replacing a roof or installing storm-proofing windows and doors may not seem like exciting home upgrades, but they have the potential to save you money and can offer peace of mind knowing your home is secure.

Installing a Security System

It can be difficult for anyone to determine the value of home security systems in their lives, but the unfortunate truth is that burglaries happen. It’s best to take proactive measures to protect your home and your family. Not only does a home security system offer protection for your loved ones and belongings, it also offers you peace of mind. Obvious signs of an alarm system such as stickers on the windows, signs in the yard, or outdoor cameras can deter a burglar whose crime is often based on opportunity. Many modern home security systems nowadays can be controlled via your smartphone app, allowing you to lock doors and remotely activate cameras and lighting from anywhere.

If your home has security or safety devices installed such as stand-alone burglary alarms, deadbolts, water leak detectors, smart home devices, or a fully monitored security system, you may be able to save some money on your home insurance premiums. If you have more than one protective device or if your security system includes around-the-clock professional protection, then you’re likely to save more. Be sure to discuss with your insurance agent how these upgrades can benefit you by offering protection and financial benefits.

Final thoughts

If there’s one thing to take away from these tips, it should be to make sure you and your insurance company are on the same page when making any renovations to your home. Let them know about your remodeling plans and ask whether you need other types of insurance to protect you financially through the project. Home renovations should be exciting, knowing that the investments you put into your home could protect you, improve your quality of life and lead to financial rewards. It’s beneficial to you to do all that you can to reap the maximum rewards from an asset as valuable as your home.

Article last updated on October 30th, 2023 at 11:16 am



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