Making the decision to renovate any room in your home comes after a lot of thought and planning, but don’t forget that changes in your home can create changes in your homeowner’s insurance.  Whether the renovations lower or increase the payment depends on the job, so we’re going to look at how a remodel can affect your wallet: 

 

  • Additions:  Whenever you add square footage to your home, your policy will need to be upgraded, likely increasing your premium. 
     

  • Converted Space:  Turning your garage into a home theater or creating a master suite from your attic space may not require changes to the policy if the square footage is already covered, but as replacement value has changed, you will want to increase your coverage. 
     

  • Home System Upgrades: Improving electrical and plumbing systems can lower your premiums, as upgrading them can make your home safer from incidents relating to fire and leaky pipes. 
     

  • Pools:  Installing a pool or hot tub in your backyard will add to the replacement value of your home, and you’ll need to increase liability coverage to protect yourself in case of any accidents.
     

  • Roofing:  A new roof can lower your premium, especially if you upgrade it to the latest standards of protecting your home from natural disasters. 
     

  • Security Systems:  According to Safewise, adding a home security system could lower your homeowners premium by 20%.   
     

  • Solar Panels:  You will want to talk to your insurance agent before installing solar panels to your home.  They may require a separate policy, depending on how they are mounted, which would add to your budget.  
     

  • Upgrades:  Whether you use top-quality building materials for your renovation, upgrade the finishes in your home, or install state-of-the-art appliances in the kitchen, you’ll need to change your policy to reflect the replacement value. 

 

Making changes to your home improve your quality of life in many ways, but it may come at a cost.  Protecting your investment is worth it in the end, but you want to be prepared for anything that will add to your monthly budget. Schedule a meeting with your insurance agent before beginning any major changes in your home so you won’t be surprised when your payment increases. 

 

Courtesy of New Castle County DE Realtors Tucker Robbins and Carol Arnott Robbins.   

Photo credit: otipinsurance.com