Have you been considering home renovations? If so, have you wondered if those home improvements will have an impact on your home insurance rates? In this blog, we will examine the correlation between home renovations and home insurance rates. We’ll look at what homeowners should know before they decide to renovate their homes, as well as how much a homeowner can expect to see in terms of savings or even additional costs.
Renovations That Increase Rates
Let’s start by examining home insurance rates if a home renovation actually increases home value. The general consensus is that any renovations or home improvements will increase your home’s market value, which could result in higher premiums for homeowners who are looking to sell their homes down the road. Those who plan on staying put may not be too concerned about this factor, but it’s still something to take into account when you’re thinking of renovating your home. Here are some examples of renovations that can increase your homeowners insurance rates.
- Adding Additional Square Footage
- Adding a Home Office Space
- Installing a Swimming Pool or Hot Tub
- Installing Central Air Conditioning
- Adding a Security System to Your Home
Some homeowners may be eligible for discounts on their home insurance rates if they have certain types of smoke detectors, carbon monoxide alarms, or sprinkler systems in place. However, most insurers will not offer any type of discount without some sort of additional safety measure installed at the home that is meant to protect both residents as well as visitors who enter the home.
If you are considering adding an addition to your home, make sure you are prepared for higher home insurance premiums.
Renovations That Decrease Rates
If you’re thinking about home renovations, there are some home improvements that may not directly increase your home’s market value but may actually decrease your homeowners insurance rates. Here are a few examples:
- Adding Insulation to Your Attics and Walls
- Replacing Older Windows with Newer Energy Efficient Ones
- Adding a New Roof
- Installing Solar Panels or Geothermal Heating Systems
Do I Need Renovation Coverage?
Renovation insurance may be a good option for you if your home renovations represent a significant investment and your home cannot function without those home improvements. For example, if new windows were installed as part of the renovation project and there isn’t any other type of window that can replace them, then it would make sense to invest in renovation coverage since otherwise, you’d be paying higher rates every year that goes by even though nothing has changed at home.
If you’re thinking about some smaller-scale changes such as painting an interior room or adding new drapes, these types of home renovations do not affect homeowners insurance rates either way so they don’t have much bearing on whether or not you should get home renovation coverage.
Renovations can be expensive, especially if they require permits, and other regulatory approvals to take place before any construction work can begin so it may make sense for homeowners who are looking at extensive renovations projects to invest in home renovation insurance.
If you’re interested in learning more, work with the Malhotra & Assoc. Insurance team today! We have access to many top-rated carriers and will find the best policy for your needs.
Disclaimer: This blog post is meant for general informational purposes only and may not reflect your specific policy.
About the Author: Alekha is an expert in the insurance space and has been with the Malhotra & Assoc. Insurance team since its inception. Alekha works to provide expertly written and researched content for the Maholtra & Assoc. Insurance agency.