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Remodelling? Check the 5 Renovations That Can Impact Your Home Insurance

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Introduction

Renovating your home gives it a fresh new look. While renovating and remodelling your home, you usually only think about the different aspects of your home. However, renovating your home can change the value of your house entirely. This can, in turn, affect your home insurance policy. This is because home insurance companies base your premium on a number of factors, one of which is the value of your home and the risks that it carries. So if a renovation results in an increase in the value of your home, your insurance premium may increase as well. But not all renovations increase the value of your home; some might decrease it as well. Here's how these 5 common home renovations affect your home insurance coverage.

Renovations that increase home insurance rates

While planning your home renovation, it is a good idea to know which home renovations can increase the valuation of your home. Here are the ones that can increase your home insurance premiums.

1. Building a pool

Long, humid summers call for a swimming pool at home. However, having a swimming pool at home poses risks of injuries or drowning. This means that in spite of its luxurious aspect, it increases your liability risk. In case of any such accidents, people can hold you responsible for their damages. Therefore, your home insurance premium will rise significantly. Your insurance provider will probably advise you to buy additional liability coverage than what is normally needed. Furthermore, surrounding structures like pool deck, slides, locking fence will also carry coverage in case of any damage.

2. Expanding space

Every home needs more space to accommodate a growing family. This means adding more livable space to your house such as a room or a new bathroom. This may increase your home insurance rates because there is simply more space to provide coverage for. So, you would need to purchase an additional insurance policy if your insurance agent says so. The same is applicable even if you're adding outdoor space like a garden or a lawn.

3. Adding office for home business

With the Covid-19 pandemic, working from home is becoming the mainstream idea. Be it a corporate job or a small business, having an office space at home truly helps. In that case, you would need home-based equipment like a table, chairs, laptop, shelves etc. Sometimes, businesses might need special equipment like sewing machines for production to run in full swing. So, if you're transforming a room into an office, your existing insurance coverage might not be enough. Hence, you will need to purchase an additional insurance policy. Here there are three options:

– Add an endorsement to your existing homeowners’ policy in order to extend your existing limit and cover potential losses.

– A businessowners policy comes with a different set of coverages that are not covered in a homeowner's insurance policy.

– An in-home Business Insurance can give a small business the same protection that a larger company would get.

4. Upgrading kitchen or bath

Two of the most used parts of our homes are the kitchen and the bathroom. The tiles, cabinets, faucets might all need an upgrade after a certain amount of time. However, these changes can change the valuation of your home by making it costlier than before. Hence, if you upgrade the countertop in the kitchen or add a fancy bathtub to your bathroom, it is very likely to trigger a change in your insurance premium. So, you must inform your insurance provider about the changes you're making.

Renovations that lower home insurance rates

Changes to your home that make it safer can also decrease your home insurance rates.

5. Renovating or replacing your roof

Renovating your roof not only increases the valuation of the property, it also significantly lowers your insurance premium. If you renovate your roof to make it water and windproof, potential damages within your home decreases significantly. Thus, you might be eligible for some great discounts while installing a new roof or getting the old one repaired. This is especially likely if you live in a place which is prone to torrential rains and hurricanes in India. You can check with your insurer for further details.

Conclusion

While renovating your home, the last thing you think about is your home insurer. But a quick consultation with your insurance agent can help you better implement the correct renovation plans and choose the best home insurance policy in India as well.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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