The terms of every homeowners insurance policy are based on the condition of the property when the coverage is issued. If you intend to renovate your home, you’ll have to update your policy so that it corresponds to the changes. Otherwise, there could be major gaps in the coverage or you could end up paying more than necessary for insurance.

When Do Renovations Call for More Coverage?

When to Buy More Liability Coverage

Review your current policy before starting any work because you may need more liability coverage. If a subcontractor gets hurt on the premises, or a guest trips over the construction equipment they left behind, you could be financially responsible.

Depending on the scope of the project, you may need additional coverage once it’s complete. For example, if you install a pool, you may have to maintain those higher liability limits even after the construction is finished. Pools present several hazards, and homeowners are generally responsible for any injuries that occur because of them. 

When to Buy More Dwelling Coverage

If your home sustains damage in a covered event, your dwelling coverage will reimburse you for the repairing or rebuilding costs, up to the policy’s limits. As such, you’ll want to buy more of this coverage if you perform renovations that increase the home’s property value. If disaster strikes after you renovate the bathroom, build an addition, or finish the basement, chances are the old limits won’t be enough to restore the new upgrades. 

When Renovations Warrant Lower Premiums 

Many homeowners are pleasantly surprised to learn that certain upgrades can actually lower their premiums. This is because there are some renovations that significantly reduce risk. For example, if you replace the roof, the entire structure will be less vulnerable to damage from inclement weather.

Likewise, updating the electrical wiring will reduce the risk of a fire, and installing new pipes will prevent flooding. Before conducting any renovations, call your carrier and ask if the upgrades will yield a reduced rate.

If so, ask what kind of documentation you’ll have to supply to get the discount. You may need to obtain the records, blueprints, or schematics from the contractor who performs the work. 

If you’re planning on renovating your property, contact Pella Mutual Insurance Company in Marion, WI, for a new homeowners insurance policy that accounts for all the upgrades. Founded in 1876, this small, local agency is proud to serve clients across northeast Wisconsin. To provide property owners with the best coverage possible, their seasoned agents have flexible underwriting capabilities, and they can tailor a policy to meet your specific needs. To learn more about their products, visit their website. To request a quote, call (715) 754-5039.