Will Your Home Insurance Cover Your Next Renovation Project? What You Need to Know
Your home insurance policy includes a specific type of coverage called "dwelling coverage." The amount of dwelling coverage that you have is based on your overall home value and the approximate cost to rebuild your home in the event of a total loss. When you renovate your home, you may increase its value — and if you don't inform your insurance company, you may be left underinsured.
These are the home improvement projects that could affect your overall value and require you to increase the amount of insurance coverage that you have for your home:
Adding a Pool or Hot Tub
When you decide to install a pool or hot tub in your backyard, you are likely thinking more about the endless days and nights that you will spend relaxing. However, these home improvement projects may increase your home's value — as well as your liability — which may cause an insurance premium increase. It's important to budget for this when you consider the overall cost to install and maintain your new pool or hot tub.
Replacing Your Home Siding
Replacing the siding on your home will have a significant impact on your property's facade. Not only will it boost your curb appeal, but it will also increase the value of your home. The increase in value may be so high that it could leave you without enough insurance coverage in the event of an emergency, so you should inform your insurance company that you are taking on this project.
Upgrading the Kitchen or Bathroom
Kitchen and bathroom renovations offer you the highest return on your investment, as these projects make your home more appealing to potential buyers and can drive up the sale price of your house. Noting the high ROI, it's necessary to keep your insurance company informed when these projects are complete.
Investing in a Home Addition
A home addition, such as a second story or additional living space that changes the footprint of your home, will significantly change the value of your home. This is perhaps the most important project to tell your insurance company about, as you do not want to risk being underinsured after you have finished a beautiful home addition.
In order to fully understand the impact that your home renovation project may have on your homeowner's insurance policy, contact your insurance agent prior to beginning the project. This will give you an idea of the impact that your project will have on your coverage and will allow you to budget for any insurance premium increases that may occur.
About the Author
Kimberly Hering
Kimberly Hering's devotion to helping people achieve their real estate goals stems from her genuine enjoyment of the process. Whatever the task, Kimberly makes it her mission to get it done, however she can, without compromising her client's needs. Often, that means thinking outside the box. After working with Kimberly, clients describe her as being Trustworthy, Creative, Patient, Highly Skilled, Attentive to the Process and having a lot of Integrity.
After spending more than 15 successful years working on Wall Street, Kimberly transitioned into Real Estate, joining Alain Pinel Realtors, then moving to Zephyr, now Corcoran Global Living, in 2018. During her career on Wall Street, Kimberly was a Vice President working as an Institutional Equity Salesperson for Montgomery Securities for 10 years. She covered the top money managers throughout the US and Canada. She joined Jefferies & Co as a Senior Vice President managing the Western Region Institutional Sales group, while continuing to cover the top money managers.
Kimberly leverages her extensive experience selling equities to top money managers throughout the US and Canada, to successfully negotiating any Real Estate transaction seamlessly for her clients. Kimberly is well versed in Marin's neighborhoods, towns, cities, and education system.
Living in the Bay Area for 35 years, 25 years in Marin and having 2 sons in local Marin schools, Kimberly spends a lot of time volunteering in the community and serving on various local Boards. Kimberly has a collection of resources ranging from the best local breakfast spots to vetted contractors. With her reliable list of valuable resources, Real Estate experience and unsurpassed knowledge of Marin's many communities, Kimberly can guide her clients through every aspect of a Real Estate transaction seamlessly.
Relocating to Marin, downsizing, upsizing, first time home buying, final home purchase or sale, or a lot to build a dream home, no matter the undertaking, Kimberly works seamlessly until the job at hand is completed with 100% satisfaction.