Home Improvements: Do I Need to Update My Insurance Coverage? - NYCM Insurance Blog

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Mar 25, 2022

Home Improvements: Do I Need to Update My Insurance Coverage?

 
















If you’re planning some renovations or improvements to your home, it may not occur to you  during all the hustle and bustle of planning and working with contractors that you may need to update your home insurance policy. Depending on what type of home renovation you’re doing, the finished product may leave you over- or under-insured, and some renovations may leave you eligible for discounts on your premium.

 

Continue reading to learn about five common home renovations and how they can impact your home insurance.

 

Building an Addition

 

When you purchase home insurance, part of your rate is determined by your house’s square footage and the requisite cost to repair it in the event of any issues or losses. If you are doing renovations to expand the square footage of your home, you may be increasing your home’s value from what it was when you purchased your policy.

 

It’s very important you update your home insurance after building an addition to ensure you aren’t under-insured in the event of something happening to your home. If you build an addition without updating your home insurance, you may not be fully covered and could be liable to sustain losses if your house is damaged.

 

Remodeling Your Home

 

As with building an addition, if you are remodeling your home’s kitchen or bathroom, you may be increasing the value and thus in need of updated or additional coverage. If you upgrade your kitchen or bathroom and something were to happen to it, without updating your coverage you may be liable to cover some of the damage out-of-pocket.

 

Common upgrades that can affect your insurance include installing new countertops, replacing cabinets, and redoing a hardwood or tile floor. If you’re undergoing these renovations, you may want to review your coverages to ensure your upgrades are covered.

 

Installing a Security System

 

There are two kinds of home security systems: professionally monitored or self-monitored. Home security systems are becoming more common as self-monitoring options are now easily accessible and affordable.

 

Installing a security system in your home can give you peace of mind as a proven burglary deterrent, and some insurance companies will offer a discount to your premium if you have one installed. If your home security system includes features like environmental monitoring to detect fire, smoke, or water damage, you may even be eligible for additional discounts, depending on your carrier.

 

Adding a Swimming Pool

 

Depending on the type of pool, adding a swimming pool to your property can affect your insurance and fall under the category of other structures (also known as Coverage B). If installing a pool, you may require liability coverage as pools are considered an “attractive nuisance,” which is a feature on your property that also presents some degree of danger.

 

If you have a new pool, you also have a new hazard with which one could injure themselves. The reality is, the world is a litigious place and it is not uncommon for a person to be sued. Umbrella coverage can help you protect your finances and avoid financial difficulty if you were ever sued and the judgment or settlement exceeded your underlying policy limits.

 

Rewiring Your Home

 

Rewiring your home can be a costly upgrade to make, but one that can improve the safety of your residence and consequently may lower your premium. The quality of a home’s electrical system can affect insurance because poor wiring can result in fires or electrical problems.

 

If you’re improving the wiring in your home, you’re also increasing the value and the level of safety.

 

Renovating, remodeling, and adding to your home are big undertakings that can increase your home’s value and make it a more comfortable, personalized place to reside. Be sure to update your insurance to reflect these changes to save yourself from any issues that could take place after the fact.