Your home is your sanctuary, so when you plan renovations, your main thoughts might be about comfort, style, and value. However, making changes can significantly impact your home insurance. Some upgrades may require increased coverage, while others may offer an opportunity to save on your premium. Here’s what every homeowner should know before picking up the hammer.
Adding a pool is a dream for many families, but it introduces substantial liability risk. Insurers may require you to increase your liability limits or recommend an umbrella policy, and they’ll likely mandate safety measures like fencing. These added exposures almost always result in higher premiums.
Expanding your home, by finishing a basement, adding a sunroom, or building an in-law suite—increases your property’s rebuild value. This means your dwelling coverage may need to be raised, leading to increased premiums to ensure you’re fully protected after a loss.
Major kitchen and bath remodels don’t add square footage but do enhance your home’s value, particularly if using high-end materials or appliances. As the replacement cost rises, so does your insurer’s exposure, which may translate to higher rates. Always notify your insurer; you may need to adjust your policy.
One of the most effective ways to potentially lower your home insurance is by installing a new, more durable roof. Insurance companies tend to discount homes with weather-resistant or fire-resistant roofs because they present a lower risk of claims. Be sure to confirm with your insurer to capture any available savings.
Updating old wiring or plumbing to meet current codes greatly reduces your risk of fire or water damage. Insurers may offer discounts for these upgrades, especially if your home previously had outdated, riskier systems. Modern systems lower your risk and could save you money on premiums.
Home security systems and safety upgrades, such as smart alarms or fire sprinklers, not only provide peace of mind but also qualify many homeowners for insurance discounts. The higher the level of protection—like systems that alert emergency services directly the bigger the potential savings.
Converting space into a dedicated home office (especially for a home-based business) or creating a rental unit downtown or above the garage can affect your policy. Business activity can increase your liability risk, and rental income use often requires additional or specialized insurance. Make sure your insurer knows about these changes to prevent costly coverage gaps.
Failing to report major renovations to your carrier can mean you’re underinsured and face denied claims if disaster strikes. A quick check-in with a trusted agency, like CF&P Insurance Brokers, ensures your policy aligns with your home’s current value and risk profile. Contact us today or call us directly at (925) 956-7700.
Before you break ground or start swinging the hammer, contact us today or call us directly at (925) 956-7700, complimentary home insurance review. Our local team will make sure your upgraded home is properly covered at the right price, so you can enjoy your renovations stress-free. Reach out now and protect your investment!
· Bankrate: https://www.bankrate.com/insurance/homeowners-insurance/home-insurance-and-renovations/
· Yahoo! Finance: https://finance.yahoo.com/news/7-renovations-impact-home-insurance-145141369.html
· Experian: https://www.experian.com/blogs/ask-experian/what-effect-do-home-renovations-have-on-home-insurance-costs/
No. Upgrades that reduce risk (like a new roof or security system) may lower your premiums, while value-boosting or riskier projects (like pools or additions) often increase them.
Yes. Major projects may require policy changes or added coverage during construction and after completion.
You risk being underinsured—meaning new features may not be protected if you need to file a claim.
Absolutely. Upgrades like smart alarms, fire sprinklers, or plumbing/electrical updates often reduce your risk and your annual premium.
