Home Insurance Articles
When To Report Home Additions To An Insurance Company
2010-08-21
Homeowners insurance quotes are based on a number of factors - the most important being the value of the home and the living space that the home contains. The higher the value of the home to replace is and the greater the amount of space that a family has to live in, the higher the homeowners insurance quotes will be. While home insurance companies are well aware that fluctuations in the real estate market will cause the real and estimated values of a home to change, they cannot predict actions taken by homeowners. Over the course of a home's lifetime, very few homeowners will leave the home in the state it began, and will choose to do anything from minor alterations to full-on home additions or home transformations. It is important to know when to inform your insurance company about projects that have altered a home.
The most common type of home renovation or addition that needs to be reported to an insurance company is a finished basement. While an unfinished and finished basement represent the same physical space, once the basement has been converted to a usable space, it should be listed on a home insurance policy as part of the square footage of the home. This may cause home insurance rates to increase, but ensures that the basement is protected. If the basement is damaged but is not listed on a home insurance policy, it will not be covered and no claims can be made for it as it is not a part of the property which the insurance company protects.
It is also important to report any room additions or changes that affect the function of the home. A common example is a porch addition to the back of the home or the conversion of one bedroom into a room for rent. Not only must rental rooms be reported to and approved by your municipality, but they must be listed as such on your insurance policy. If they are not, and a tenant causes damage to the home, your insurance company may have the right to refuse to pay for any repairs. In the case of a back porch addition, the space will not constitute living area, but can be subject to coverage as it is attached to the home. Again, reporting it to the insurance company is essential to ensure it is properly covered.
Home additions can a great deal of value to a home, but this value must be reflected on an insurance policy in order to ensure that the home is properly protected. Anything that changes the value or the function of a home significantly must be reported to your insurance provider.