6 Home Renovations that Can Affect Your Insurance [Video]

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Logo, Travelers. Title, Can home renovations affect my homeowners insurance? Animation, a porch is added to a home

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Home renovations can make your home more enjoyable, but can also mean you need to update your homeowners insurance. So before tackling that new porch, remodeling your kitchen, or adding a patio or deck, make sure you have the coverage that fits your updated home. Here are some tips.

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Before you renovate, ask your agent if you need to make any changes to your homeowners policy, because some upgrades, like adding a living space, a pool, or other detached structures may require you to increase your coverage as a result of the renovation.

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Text on a computer screen reads Increase Your Coverage and a red slider moves to the right.

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On the other hand, some home renovations, like security systems, fire protective devices, and green home certification can qualify you for savings on your policy.

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A contractor holds up a document with a checkmark for the homeowner.

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Also, it's important to ensure your contractor has insurance. Ask them to provide their certificate of insurance.

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Home remodeling or not, it's a good rule of thumb to review your insurance annually to make sure your coverage is still appropriate.

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If you're considering a home renovation, talk to your Travelers representative or independent agent today.

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Travelers dot com. Travelers Casualty and Surety Company of America and its property casualty affiliates, One Tower Square, Hartford, CT 06183. This material does not amend, or otherwise affect, the provisions of any insurance policy issued by Travelers. It is not a representation that coverage does or does not exist for any particular claim of loss under any such policy. Coverage depends on the facts and circumstances involved in the claim or loss, all applicable policy provisions, and any applicable law.

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If you're planning a home renovation, you may want to call your insurance agent first because this decision can impact your homeowners insurance. Some home renovations will change the amount of coverage you need, while others could even help you qualify for a discount. We cover six common scenarios that could affect your insurance, so you can plan ahead.

1. Building a New Addition

When you expand and improve your home, you could likely increase its replacement value. This is the cost to repair or rebuild your home. Some additions that could increase your replacement value include: adding a second-story bedroom, expanding the living room or building a new garage.

After building a new addition, or making updates or other improvements, you may need to increase your coverage because the value of your home, and the cost to rebuild it will likely have increased. Most insurance companies require your Coverage A or dwelling coverage limit be at least 80 percent of the replacement value of your home.

Your insurance agent can recalculate your home value to determine whether you'll need more coverage because of the addition or improvement.

2. Building a Pool

If you're looking to add a pool, you will want to contact your insurance agent to review coverage for changes to your property's value, as well as any increase in risk. When people are swimming and running around the pool, there's the chance for an accident. If someone gets hurt, they could try to hold you responsible for damages. This can apply even if the accident isn't your fault.

Check with your agent to see whether your existing policy covers a pool and if you need to increase your liability coverage. This coverage can help pay damages to injured persons and provide for a defense if you are sued as a result of their injuries.

You should also ask your agent what steps you can take to keep your pool safe so you can avoid accidents. Adding a fence with a lock is a smart move. You could also add lights with motion sensors or a pool alarm to discourage trespassers. Consider skipping the diving board, because this increases the chance of an accident and your insurance cost.

3. Adding a Deck

A new deck is another improvement that can add value but also risk, especially if the deck is attached to a second story or higher. You should let your agent know that you've added a deck, so he or she can adjust your policy as necessary.

4. Renovating the Kitchen

Upgrading the kitchen can significantly increase the value of your home, especially if you switch to higher-quality counter tops, appliances and new flooring. You should contact your agent to see if you need to increase your insurance coverage.

If your contractor upgrades the plumbing or electrical wiring as part of the renovation, ask your homeowners insurance agent if you qualify for a discount or if your coverage needs to be adjusted. These upgrades can reduce the chance of flooding water damage and fire, so check if your insurance company has discounts that can help to reduce your premium.

5. Finishing the Basement

Finishing your basement can also increase the value of your home. That means, yet again, you may need more homeowners coverage. Flooding can be a concern, especially for the lowest floor in your house. It is important to note that most homeowners insurance policies do not cover damage caused by floods. Ask your agent to review your coverage and look to see if there are steps you can take to help prevent future damage, like installing a sump pump.

6. Redoing the Roof

Before you redo your roof, ask your insurance agent whether this could qualify for a discount. Some companies offer a discount when you reinforce the roof or use stronger roofing materials that are wind, hail and leak-resistant. Your agent can explain how to qualify. At the same time, redoing the roof could increase your property value, which means you might need more coverage.

When you’re considering making home renovations, it is a good idea to contact your local independent agent or a Travelers representative to get a home insurance quote. Their knowledge and expertise can help you get the most out of your discounts while making sure your home is adequately insured.