Unexpected Costs: The Hidden Impact of Renovations on Your Home Insurance

Whether it's a long-awaited kitchen remodel, a sparkling new bathroom, or a finished basement for extra living space, renovations can significantly enhance your home's functionality, comfort, and value. However, amidst the excitement of planning and demo, it's crucial to consider the potential hidden impact renovations can have on your homeowners insurance.

Increased Dwelling Coverage Needs: A Potential Cost Surprise

Many renovations add value to your home, which is fantastic! However, this increased value can lead to a coverage gap in your existing homeowners insurance policy. Here's why:

• Higher Rebuild Costs: Construction material and labor costs fluctuate over time. Your existing policy limits might not reflect the current cost to rebuild your home entirely if a covered loss like a fire or tornado were to occur.

Solution: Before starting any major renovations, contact your insurance agent. They can review your current policy limits and ensure your dwelling coverage accurately reflects the increased value of your home after the renovation. This will prevent any unwelcome surprises in the event of a claim.

Renovations and Potential Liability Risks: Don't Get Caught Off Guard

Certain renovations introduce new elements that can increase your liability exposure. Here are some examples to consider:

• Swimming Pools: The allure of a backyard oasis comes with the risk of accidents like slips, falls, or even drowning. If someone gets injured on your property, you could be held liable for significant medical expenses and legal fees.

• Fireplaces and Wood-Burning Stoves: These cozy additions require proper installation and maintenance to prevent fires. If a fire originates from these features due to improper use or maintenance, your insurance company might deny coverage for damages.

• Home Offices: With the rise of remote work, many homeowners are converting spare rooms into dedicated offices. Standard homeowner policies might not cover business equipment or increased foot traffic associated with a home office.

Solution: Before renovations begin, discuss your plans with your insurance agent. They can help you determine if you need additional liability coverage or specific endorsements on your policy to address these potential risks. Proactive communication can prevent significant financial consequences down the road.

The Importance of Disclosure: Avoiding Coverage Gaps

Here's a critical point to remember: failing to notify your insurance company about significant renovations can lead to coverage gaps. If you don't disclose renovations and then experience a loss, your insurance company might deny your claim because the risk profile of your home has changed.

Solution: Always communicate openly with your insurance agent before starting any major renovations. They can advise you on the potential impact on your coverage and guide you through any necessary policy adjustments. Maintaining transparency ensures your home is adequately protected throughout the renovation process and beyond.

Your Insurance Partner for Renovations: Scavone Insurance Agency Center LLC

At Scavone Insurance Agency Center LLC, we understand that navigating renovations and insurance can be complex. By proactively discussing your renovation plans with us, you can ensure your home is adequately protected throughout the process, potentially saving money on your homeowner's insurance. Contact us today for any queries. Call us at (800) 559-0027 for a quick consultation.