Renovating your home is the perfect way to increase its value and get the most satisfaction out of your living space. However, before starting any major renovation project, you have to take your home insurance into consideration. In many instances, your policy will need to be updated to account for the changes and ensure you remain adequately protected. Below is an overview of how your coverage might be affected.

Why Are Insurance Premiums Impacted by Home Improvements? 

Your home insurance policy was originally written according to the size, condition, and value of the property at that particular time. As such, once improvements have been made, those terms will likely no longer apply.

If the home’s replacement value has increased, you’ll need to extend your coverage limits so it’s sufficiently protected in the event of damage. If you add new furnishings to the renovated space, you’ll also want to expand the portion of your policy that covers personal belongings. In both cases, your premiums will increase as well.

How Do Certain Upgrades Influence Coverage Costs? 

While some renovation projects will raise coverage costs, others can reduce them. For example, installing a swimming pool or building a deck comes with higher liability risks. The liability coverage included in a standard home insurance policy isn’t typically enough to cover injury claims from these features; thus, homeowners often buy umbrella policies to add an extra layer of protection.

As another example, building an addition results in extra square footage that needs to be insured as well as higher premiums. On the other hand, putting in a security system, upgrading the HVAC system, revamping your electrical wiring or plumbing, and getting a roof replacement are all improvements that will lower your rates. These upgrades all help make your home safer and more resistant to damage. 

If you’re planning a renovation project, contact Reid Insurance Group in Lovington, NM, to make sure your home insurance policy includes the right type and amount of coverage. They’ll carefully assess the changes and determine if you need to purchase more protection or if you’re entitled to new discounts. Backed by nearly 75 years of experience, they’re proud to provide residents in southeastern New Mexico and West Texas with high-quality and affordable products. Call (575) 396-3645 to set up an insurance review, or visit them online to learn more about the services they offer.