Home Insurance Articles
The Effect Of Home Renovations On The Cost Of Home Insurance Quotes
2010-08-22
Before beginning any home renovations, you should understand how they can affect both the overall value of your home, as well as the premiums of your home insurance. Certain renovations can increase the cost of your insurance, as you are increasing what your home is worth. Other renovations can actually decrease your premium cost, as it reduces the risk your home faces against crime and natural disasters.
The majority of renovations and additions you make to your home will add value. As your home becomes worth more, it becomes more expensive to insure. If you make a claim on your home insurance policy, you will be claiming the new, higher value, so your insurance company will adjust your premium to reflect this. Home additions, kitchen remodels, bathroom renovations, flooring installation, and other expensive projects will most certainly increase the value, and respectively, the premium of your insurance. Once your renovations are completed, it is extremely important to contact your insurance agent and have your home revalued. If an issue arises and you have to make a claim before your appraisal, you will not receive the value of the renovations, but of the last appraised value. This can be devastating for large renovations that cost tens of thousands of dollars.
While some home renovations may cause your premiums to increase, others can actually decrease your costs. This is possible when the additions you make reduce your likelihood of making a claim. For example, if your home is located in an area that is prone to hurricane damage, and you replace your siding and windows with wind-resistant materials approved by your insurance agency, you may see a reduction in the cost of your annual insurance. Likewise, installing security systems and features, smoke alarm systems, fire doors, and other similar projects will help you net a smaller insurance bill. Most insurance agents can provide you with a list of improvements that will lower your costs, so be sure to discuss these with your company, or with companies you are receiving home insurance quotes from.
Since most renovations are expensive, it is extremely worthwhile to have your home appraised once they are completed, or in some cases, during construction. While it is not always pleasant to experience an increase in insurance premiums, it is worth the peace of mind knowing that the entire value of your home is insured, and not a less-expensive version. Be sure to keep in contact with your insurance agency in order to ensure that your home is properly valued, as well as be alerted as to renovations and additions you can make in order to reduce the cost of your home insurance premiums.