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5 Home Renovations That Require You to Update Your Home Insurance Policy

When you plan to renovate your home, you probably think about picking out new materials, colors, and designs. An in-depth conversation about the renovation with your home insurance carrier is probably not on your list of things to do. Home renovations can affect your home insurance policy, however.

When you renovate your home, you often add to its value. Your insurance policy may turn out to be inadequate to cover the increase in value. Improvements can also make a house safer and lower your premiums. If you don't talk to your insurer about your home's new features, you may continue to pay the same premium levels that you always have.

If you're not clear about the different ways in which a home remodel or home improvements can affect your insurance, the following pointers can help you.

Putting in a new roof

Home insurance companies see most of their claims arise from damage to roofs. Roofs are particularly susceptible to damage by rain, snow, wind, and hail. New roofs, especially ones with features such as waterproofing or hurricane straps, are eligible for improved insurance rates. If you plan to get a new roof, you should talk to your insurance carrier about what features you should include for the best premium.

Putting in a new pool

Pools may be a lot of fun, but they raise your insurance premiums. A pool comes with the risk of drowning, and the risk of slip-and-fall injuries. Should a neighbor or friend visiting sustain an injury, they could sue you. Insurers usually require that homes with pools have personal liability protection worth at least $100,000. Diving boards and hot tubs send premiums up, as well.

Renovation for a home business

If you plan to remodel for a home business, you need to make sure that you're covered for the value of the new space, and for any new equipment. If you plan to offer violin lessons, math lessons or yoga classes out of your home, it is likely to increase the number of people visiting your home. It can raise your exposure to the risk of being sued by someone who is injured on your property. You may need to add to your coverage for this reason, as well.

Additional living space

You may wish to add more square footage to your home for your family or to rent out. In either case, you should understand that additional living space increases the value of your home. In the event of damage to your home, you will need additional coverage.

If you're finishing the basement with insulation, drywall, and carpeting, and if your basement also houses your sump pump, you need to protect your investment with water backup coverage.

If you plan to rent out a part of your home, you will need to buy landlord coverage. Insurance companies are of the view that renters are higher-risk occupants in a home than owners.

Upgrades to the kitchen and bathrooms

A kitchen or bathroom makeover can add to the value of your home. If you don't update your insurance policy, you could be left with inadequate cover. In the event of damage to your home, your policy won't help you rebuild.

When you upgrade your kitchen and bathrooms, it should raise your insurance. You will probably put in new wiring and plumbing systems, however. When you notify your insurance company with pictures and documentation to prove the new additions, you could end up with discounts. In the end, it could work out in your favor.

Your home insurance needs to keep up with any changes that you make. It would even be smart if you prioritized changes such as a new roof or improvements to your wiring or plumbing, with an eye on lowered insurance rates. The lesson to take away is that you should always remember your insurance policy when you make changes to your home.

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