As America’s savings rates rise and economic stimulus measures rise again, renovation work is on the rise – but how does that affect homeowner insurance? (iStock)
U.S. homeowners are taking on home renovations during the pandemic, compounded by higher savings and a low interest rate environment. According to a survey by Bank of America, 70% of Americans decided to take on home improvement projects in the past year. Further projects are planned for 2021.
“With the pandemic, we’ve seen an increase in homeowners using our project tracking features,” said John Bodrozic, co-founder of Home Zada, a home ownership data analytics platform. “The most common projects are kitchen and bathroom renovations that are becoming a major home improvement. The next level of projects are more flooring and painting projects that are part of minor renovations.”
If you’re looking to remodel or remodel your home, keep in mind the impact your home project can have on your homeowner’s insurance. Your insurance premiums may change depending on the risk or liability of the project. When you’re ready to take the next step, you can use Credible to compare homeowner insurance companies and buy their insurance policies.
Does Homeowner Insurance Cover Home Improvement?
Many home improvement projects will face an obstacle to home insurance coverage. “Most renovations are not covered by home insurance,” said Bodrozic. “This is due to the fact that most policies are geared towards housing cover for rebuilding a house and content cover for your personal property. Typically, the homeowner needs to have records showing that something has unforeseen damage has done to make a claim on the house home insurance. “
Review your insurance policy before diving into a home renovation project. Then go to Credible to compare the plans and make sure you have adequate coverage.
HOW DO YOU BUY OWNERSHIP INSURANCE?
What renovations could cause homeowner insurance to go up?
According to Amin Eskooch, CEO and co-founder of WiiBid Solutions, a home renovation refinancing company, the decision on how renovation projects can affect your homeowner’s insurance costs is based on a “risk perspective” and homeowners need to “consider whether the renovation increases or reduce the risk or liability to the insurance company. “
Here’s how Eskooch breaks down renovation projects and their impact on insurance premiums:
Home renovations that increase your home insurance (increased risk and liability):
- Build a pool – Everything that has to do with water is a risk for insurance companies from multiple liability perspectives.
- Add an office – This can lead to increased pedestrian traffic.
- Expand new space – For example, if you add a conservatory, it expands the area of your property, which increases the likelihood of exposing you to property damage.
- Kitchen upgrades – Potential equipment replacement costs can increase your personal property and home protection premiums.
ARE YOU SELLING YOUR HOME? MAKE SURE TO MAKE THESE IMPROVEMENTS FIRST
Home renovations that reduce your home insurance (reduced risk and liability):
- Change roof
- Install basement insulation
- Restoring / restoring the deck
- Structural improvements, B. install better security features or add new floors and / or windows.
Are you planning a major renovation project and worried about different levels of coverage? It is important to shop around to find the right home insurance plan that suits your needs. Visit Credible to start the process and maximize the value you get from your homeowner’s guidelines.
IS THE FORM COVERAGE INCLUDED IN MY OWNER’S INSURANCE POLICY?
Home Insurance Tips for Large Renovation Projects
Follow these steps when linking your homeowner insurance to your home improvement project.
1. Make home builder insurance an option
There is a special policy called “Builders Risk Insurance” that you get when you build a property. “If you’re just repainting and installing new floors, it may not require a home builder risk policy,” said Bill Samuel, a residential developer with Blue Ladder Development in Chicago. “If you’re doing a major remodel, you might want to ask your agent about a builder’s policy.”
Just expect to pay more for home builders’ risk insurance than you would for basic home insurance, added Samuel. “Builders’ risk policies are generally twice as expensive as regular policies,” he said.
YOUR HOME OWNERS INSURANCE POLICY SHOULD INCLUDE THESE 3 ITEMS ACCORDING TO FINANCIAL PROFESSIONALS
2. During the initial consultation, ask for a written statement from a contractor
Get your insurance company on board early and save some money in the process.
“Have your contractor point out current shortcomings in the home and how the proposed renovation can improve living conditions and prevent costly repairs,” said James Surrey, founder of Review Home Warranties, a home warranty review platform. “Send the written statement to your insurer for review. The idea is that renovations will fix existing structural problems and reduce the chances of the homeowner making a claim for repair costs.”
WHAT’S THE DIFFERENCE BETWEEN HOME WARRANTY AND HOME OWNERSHIP INSURANCE?
3. Sell the liability problem
Home renovations mean updating a portion of the home that is out of date and would likely require major repairs sooner rather than later. “With renovations, your home is essentially less liable to the insurer,” said Surrey. “If the renovation brings the house up to date, the provider may be willing to lower your monthly premium or deductible.”
Save time and money by comparing home insurance companies with Credible.
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