Home Renovation Insurance
Home Insurance

Getting the Best Home Insurance While Renovating

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What You Need to Know About Home Renovation Insurance?

Renovations can be filled with equal measures of excitement and stress, but you can diminish some of the stress with home renovation insurance. This will free your time and mind so you can focus more on the enjoyable parts of creating your new space, and not on everything that could go wrong—and how much it could cost you.

Make no mistake: While home improvements can increase the value of your home, they can also affect your home improvement insurance. So, cool your crowbar and keep reading: we’re going to tell you what you need to know about home renovation insurance.

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What Is Home Renovation Insurance?

Here’s the thing: There’s no such thing as home renovation insurance, insofar as this type of insurance does not exist as a separate product. Home renovation insurance really refers to the act of making sure your existing home insurance for renovations covers you during and after a renovation. 

After all, when you renovate your home, you may need extra coverage to protect against incidents and accidents that may occur. 

What’s more, your existing insurance is in place to cover your existing home. Adding more square footage or different features can change the price of your premiums—and the change would always mean an increase. 

There are some changes you can make to your home that will reduce the cost of your insurance (like getting a new roof) and others that will not require or change home improvement insurance updates at all (like taking down an old clapboard in the bathroom and replacing it with tile). 

Why You Need Home Renovation Insurance?

Revisiting your insurance for a house under renovation is essential. There are a couple of reasons you’re going to want to speak with your insurance provider or broker before you renovate your home:

  1. You’re increasing the value of your home. As mentioned, your current homeowner’s insurance is meant to cover your home, as it is. When you add square footage or certain features (like an indoor swimming pool), it will increase your home’s value and therefore, your premiums. This may not be something you want, but think of it this way: If your home insurance does not cover the real cost of your home, if you ever need the insurance to replace your home, you won’t get as much as you should.

    Being underinsured doesn’t pay off in the long run.

    And remember, there are other Renos you can do that will decrease your premiums, like getting that new roof so it pays to check in with your insurance company either way.

  2. You’re not going to be home during the renovation. Extensive renovations can render your home unlivable, so you may need to reside elsewhere for the duration of the construction.

    The problem is your homeowners insurance is only meant to cover your home when you are living in it. If you’re not going to be there for an extended period (usually defined as anywhere from 30-60 or more, depending on your policy), you should look into vacant home insurance. This type of insurance will protect your home against any damage that happens while you’re away—like water damage—which you may not notice until you get back.

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When You Should Get Insurance for a House Under Renovation?

It doesn’t matter if you’re doing the work yourself or hiring a contractor with their own insurance (and any contractor you hire should always have their own insurance): you need to make sure your home insurance for renovations can cover potential perils of renovation.

Again, call your agent or insurance provider before you begin your project. Here are some types of coverage you may need or want to add to your policy. 

  • No-Fault Medical Protection. You probably already have this coverage if you have a homeowners insurance policy, but you may want to increase it if you are going to be doing the renovations yourself, with some help from friends or family. This way, if anyone gets hurt, they can just submit their medical bills to your insurance company directly and you’re less likely to be sued.

  • Dwelling Under Renovation Coverage. This nifty type of insurance protects in two ways: first, it protects the construction material while they are on your property so if they’re stolen or damaged, you’ll have the money to replace them.
    Next, it covers against foundation collapse in the event your basement walls give way during construction or renovation.
    The price of dwelling under renovation coverage will vary widely depending on your home and the scope of your renovation, so talk to your existing provider or get a free quote from us now. We’ll match you with the perfect provider for your home reno.

  • Builder’s Risk. The builder’s risk add-on begins with lower costs and as you get closer to completing the project, the cost increases. Why? Because your home is becoming more valuable, so if anything should happen to your home during this reconstruction process, you’ll be reimbursed for the actual value of your home at that point in the project—no less.

    Builder’s risk insurance can cost about $500/year. 

  • Vacant Home Insurance. We’ve touched on vacant home insurance already, but it bears repeating: if you’re not going to be living in your home for the duration of a lengthy renovation, consider vacant home insurance. Your homeowners policy won’t cover any claim made in a vacant home without this add-on—though you can get it as a separate policy as well.

    Vacant home insurance costs anywhere from one and a half to three times as much as standard home insurance, because an empty home is a risker home to insure. 

  • Contractors and Subcontractor’s Insurance. Contractors and subcontractors should have their own insurance. It’s not your job to get it for them, but it is your job to make sure they have it. Just ask. This sort of insurance will include liability, property, and workers’ compensation insurance.

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The Takeaway: Home Renovation Insurance

Home renovation insurance is important to consider, especially when you’ll be adding onto the square footage of your existing home since your personal liability and property insurance limits extend only to what is in your home, right now. An addition will not be covered should anything go wrong. 

Even if you end up not needing home improvement insurance, at least speak with your agent or insurance provider so you can go into your renovations with your eyes wide open.

FAQ
No, legally, you don't need home renovation insurance but without it, you could end up paying potentially devastating sums out of pocket in the event of an accident or theft.
That's impossible to say without specifics on your current home or your project. It may end up costing nothing at all, or it may triple the cost of your home insurance policy if you need to vacate the premises.
No, but you should make sure contractors and subcontractors have insurance before you hire them. Ask to see proof.

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