Can home renovations effect your homeowners insurance rates?

In the last 12 months you may have been spending more time at home due to the pandemic. A lot of us have even remodeled our homes to accommodate a home office. According to Bank of America’s survey around 70% of Americans have decided to take on home improvement projects than in 2019 versus 2020. And by the looks of it, there are even more planned for 2021.

With remodeling fresh on a lot of our minds, you may be wondering how it can effect your homeowners insurance premiums. Yes, it can affect your homeowners insurance rate. As risk changes or increases, your homeowners insurance premium may follow.

Will my homeowners insurance policy cover my renovations?

Most renovations will not be covered by your homeowners insurance policy. Especially if the changes are not needed due to covered damage to the home. Your typical homeowners insurance policy will cover the dwelling and structure of the home in the event it is damaged by a covered peril. 

At will renovations or improvements will more than likely be the homeowners responsibility. Because of this you may want to look over your current home insurance policy before getting to far into a new project. 

Are there renovations that can cause my insurance rate to increase? 

Homeowners insurance is largely based on risk. The higher the risk, more likely the higher the rate will be. A skydiving instructor will more than likely have a higher life insurance premium than the IT professional working from home. There are a few common examples where your homeowners insurance may go up due to renovations.

If your remodeling plans involve the following, there may be an increase to your homeowners insurance rate;

1. Swimming pool – Usually if it involves water, there’s added risk.
2. Home office – If more people are visiting the home, there is added risk.
3. Additional room – If you increase square footage, you increase the area of the home where something involving risk can happen.
4. Kitchen upgrades – Replacement costs can sometimes increase your home insurance premiums related to personal property & dwelling coverage.

What remodeling will decrease my homeowners insurance rates?

1. Replacing the roof – Your roof is one of the primary focal points of a home inspector. Having an updated or new roof may help lower your rates.
2. Rebuilding your deck – Rebuilding your deck can make your home safer and less risky. Less risk usually equates to lower homeowners insurance rates. 
3. Structural improvements, installing better security features or adding new flooring etc.

Before jumping into a new project you may want to speak to a homeowners insurance agent. Find out what possible risks are involved and how exactly your rates can change. If you’re in California and need help finding a better homeowners insurance policy, give us a call! We have amazing insurance agents that know everything there is to know when it comes to home insurance. Call us today at 916 313 6100.