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How Remodeling Can Impact Your Home Insurance



Renovating your home can be an exciting venture, enhancing both its aesthetic appeal and functionality. However, it’s essential to consider the impact of these renovations on your home insurance policy. DreamMaker Bath & Kitchen of Central Texas, an experienced home remodeler, explores how a home remodel can influence your home insurance, emphasizing the need to reassess your policy post-renovation to ensure adequate coverage.

Understanding Insurance Value Adjustment

Renovations can significantly increase your property’s value. Whether it’s a modern kitchen upgrade or an added bedroom, these improvements contribute to your home’s market worth and replacement cost. Consequently, there’s a need to adjust your home insurance coverage to match this added value. Failing to update your insurance could result in underinsurance, where your policy may not fully cover the cost of rebuilding your home as it stands post-renovation.

Renovations That Increase Home Insurance Rates

Certain exterior and interior remodeling projects have a direct impact on your home insurance premium. For example, adding a swimming pool introduces new liabilities, potentially increasing insurance costs—not just because of the value it adds but also due to the increased risk of accidents. Similarly, constructing a home office or an extension increases the replacement cost of your property. These changes necessitate a reassessment of your dwelling coverage limit within your insurance policy.

Renovations That May Lower Premiums

On the bright side, some renovations can reduce your home insurance premium. Upgrading your roof, plumbing, or electrical systems can enhance safety and reduce risks of damage, making your home more insurable. Insurance providers may offer discounts for such improvements, recognizing the reduced likelihood of claims related to fire, water damage, or other insured perils.

Communication With Your Insurance Company Is Key

Before embarking on any renovation project, it’s crucial to communicate with your insurance provider. A discussion with your insurer can guide you on the necessary coverage adjustments and any potential savings from risk-reducing renovations. By consulting with your insurance agent before and after a renovation project, you ensure your coverage remains appropriate and comprehensive.

Additional Coverage Options

Depending on the scope of your remodeling project, you may need to explore additional insurance options. For significant renovations, consider a builder’s risk insurance policy to cover materials and property during the construction phase. If your renovations require you to move out of your home temporarily, you might also need to look into getting a vacant home insurance to ensure your property remains protected in your absence.

Let’s Start a Conversation!

Remodeling your home can influence your home insurance in various ways. It’s imperative to reassess your policy post-renovation to ensure your coverage reflects the increased value and any new features of your home. If you’re searching online for a “home contractor near me” for your renovation, reach out to DreamMaker Bath & Kitchen of Central Texas! With us, you can enjoy a hassle-free renovation process while also protecting your investment through adequate insurance coverage. Give us a call today at (254) 523-6699 or visit our contact page to schedule a consultation. We serve Woodway, Hillsboro, Hewitt, Groesbeck, Robinson, and the nearby areas.

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