Here are some home renovations that you will want to let your agent know about that can affect your policy. This is both for the occasions where premiums could be lowered and for occasions where more coverage is needed to account for taking on more liability or needing increased replacement cost value. Check these out and make sure you have figured these into your insurance policies.
Renovations that can lower premiums:
- New Roof- This is one of the most common types of claims for insurance companies, so if you get a new roof be sure to let them know. It can affect premiums in way of savings by 10-20 percent depending on the carrier. If the policy is on ACV (actual cash value) and not replacement cost they will also need to know the age of the roof to determine pay out on covered roof loss.
- Updated Wiring or Plumbing- this can also be an upgrade where you could have some money on premium. Making the updated year more recent on this can save money in risk prevention if you are living in an older home. So don’t forget to let your agent know.
Renovations that raise premiums to make sure home is insured for the right value:
- A pool- while this may make you the most popular house on the block it can also make you the riskiest from an insurance stand point on liability. Depending on the company there could be different underwriting requirements such as fences and locks. Higher Liability limits are also required at different amounts depending on the company, normally around $500,000.
- Home Business- This could mean you need a whole separate policy. Most policies cover up to a small limit, $2,500 for example for the equipment. It is possible that it would be added as a rider on the policy, however, depending on the complexity a separate small business policy may be required.
- Finishing Spaces and Add-On- If you add livable square footage where there was none prior (attic, finished basements, add-ons) your insurance will need to be amended to account for the value of the new space. You want this to be covered in the event of a total loss and accounted for in the replacement cost.
- Kitchen and Bath Upgrades- while this may raise your premium a little. This is a common renovation that you will want reflect on your home value If your house were to burn down, you will want to make sure your counter tops are covered for granite rather than laminate for example when rebuilding.
Be sure to discuss some of the renovations with your agent ahead of time as well to make sure there is not coverage you will need during these renovations to cover the liability associated.
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