Four Renovations That Can Affect Your Home Insurance

Expensive home upgrades undoubtedly have an effect on a home’s resale value. They may also impact a home’s insurance value, no matter how costly the renovation. It is important to let your insurer know prior to making improvements, so that unforeseen circumstances, such as a fire or robbery, are covered during the renovation. Not sure which upgrades are worth the policy adjustment? These four upgrades commonly result in altered home insurance policies.

 

A home-based business – If your main source of income comes from a home-based business, what will happen to it if your home is compromised? Most homeowner policies only cover up to $2,500 in equipment compensation, so it may be wise to add an endorsement or rider to your existing policy.

 

A new roof – Because roofs fall victim to most weather-related damages, they offer the greatest discount on your premium. When you install a new roof, your premium may decrease 10 to 20 percent, depending on your insurance company. To ensure the discount is applied to your policy, be prepared to present documentation from your contractor stating that the new roof is up to code.

 

A new pool – Pools create numerous opportunities for lawsuits, so from an insurer’s perspective, they are one of the riskiest upgrades to make. Because of this, insurers may require up to $500,000 in liability coverage and security measures such as locks and fences. Your homeowner’s insurance will need an additional adjustment to cover the value of the pool, as well.

 

An addition – Your insurance company must be notified any time you increase the living space in your home, to compensate for the added value. Specific additions, such as a finished basement, may need water coverage to protect from flooding or landlord coverage if the space will be rented.

 

Source: Bankrate

Reprinted with permission from RISMedia. ©2014. All rights reserved.

 

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