Home Insurance Articles
Additions To A Home That Can Raise Insurance Premiums
2010-02-06
Ideally, homeowners insurance should cover the actual costs of rebuilding the home from the ground up in the event this becomes necessary. Homeowners insurance coverage will need to be adjusted to reflect any major remodels or additions to a home. Since these remodels and additions to a home increase the overall value of the home, it is important to ensure that the home insurance will cover the new increased value. Home insurance premiums may increase as a result of the increased insurance coverage; however it is important to protect the investment that was made into the home. Anytime there is a major remodel or addition to a home, insurance policies need to be updated to reflect the added value.
Not all remodels and additions to a home will result in an increased home insurance premium, while other additions that increase the value of the home will require additional home insurance. Installing additional safety features to a home such as installing a new security or fire alarm system, rewiring an old home, and fixing old plumbing or heating systems are looked upon favorably by insurance companies. These, and other additions that lower the risk for a potential claim, are likely to result in a reduced home insurance premium. While additional safety features may reduce premiums, the addition of large swimming pools and other add-ons increase the potential risk for an insurance claim and may result in a higher insurance premium.
Additions to a home such as adding or expanding a garage and the addition of a new room are likely to result in an increased home insurance premium. Additionally, the additions of a second floor, attic or basement add to the value of a home and increase risk for a potential claim, which may also increase insurance premiums. Major remodeling of entire portions of the home such as a bathroom or kitchen could also increase homeowners insurance rates as they greatly increase the overall value of the home. Installing new flooring, roofing, and other major installations also raise the overall value of a home and should be protected with the proper homeowner's insurance coverage.
Anytime there is an increase in home insurance coverage, premiums are likely to increase. The added coverage is necessary to protect the money invested in remodeling or making additions to the home. Anytime improvements are made to a home, whether added safety measures or additions to increase the value of the home, a home insurance policy should be updated to reflect the new additions and remodels. With such a large investment in the home, it is essential to ensure that the policy has enough homeowners insurance coverage to accurately cover the entire cost of rebuilding the home.