Some home improvements can increase the premium rates, while others can reduce the rates and you may require updating your policy. Failing to intimate your home insurance company about your modifications could leave you underinsured and you might spend a lot from your pocket for fixing the damages. Moreover, you must check multiple plans online offered by different home insurance companies to get the best deal.
Here is a list of 7 home renovations that might impact the home insurance premium rates-
Building a Swimming Pool
A standard home insurance policy usually gives liability coverage. Adding a swimming pool to your property can certainly increase the worth of a home and thus, affect the home insurance rates. A pool is considered an ‘other structure’ and significantly increases the liability risk, which will raise your home insurance premium.
However, your home insurer will guide and suggest buying higher liability coverage, if you own a pool. If your swimming pool has a diving board or slide, it will extend the liability for your insurer and they might choose not to provide coverage or charge a higher premium than usual.
Establishing Your Home Workspace
Every business that is operated from home might require additional space to establish a workspace or office. During a pandemic, working remotely is the new normal for working professionals and business owners. The business type will help you in determining the type, size, and location of your workspace.
However, adding a new space can also increase your home insurance premium rates and you will have to enhance the coverage for business-related equipment and assets. Also, you might require a separate home business insurance policy that gives your protection against crimes and worker injuries.
If you are planning to establish a home office, you can increase the existing insurance policy limit or ask for a separate business owner policy that includes an array of coverage. Additionally, you can opt in-home business insurance policy that offers you coverage with smaller policy limits and lower premiums.
Upgrading Your Kitchen or Bathroom
Updating your kitchen or bathroom will refresh the look and thus, increase your premium also. If you choose to change the laminate countertops or remove a wall to create a space bigger, you might need to enhance the dwelling coverage in your home insurance policy.
If your existing coverage is not adequate, you might have to pay out of pocket to fix the damages to your kitchen or bath after an unforeseen incident. Therefore, consider increasing the dwelling coverage to protect your modified kitchen or bathroom.
Expanding Your Space
Are you looking for ways to expand space in your home? You can modify a floor plan, finish the basement, build more storage, etc. However, a new addition may expand your space and will increase your home insurance premium as well.
If you are expanding your space with new square footage, increase the range of dwelling coverage. With any floor plan renovations, connect with your insurer to enhance your policy.
Renovating Your Roof
Renovating or improving your rooftop will save you money on home insurance premiums. Yes, upgrading your roof usually means a reduction in the premium because it will lower the risk and your home is protected with new materials. Even upgrading old appliances, electrical or plumbing system means lowering the risk and cutting down your insurance premium cost.
Upgrading Your Electrical Wire and Plumbing
Rewiring and plumbing is an expensive affair but lowers the risk of short circuit fires and electrical damage, which means your home insurance company will ask for a lesser premium. If your house is fitted with the knob and tube wiring that was used in a house built before the 1950s’, the insurer might refuse to give protection to these houses.
Therefore, it is time to upgrade your house and insure it with the right policy.
This is the same case for plumbing. If you upgrade to modern plumbing hardware, this will reduce the risk of water damages and thus, leads to lower insurance premium.
Installing Security Systems and Sprinklers
You can save on premiums by installing high-security systems. For example, if you install a fire alarm, it will ring if it detects smoke and will warn you. An alarm system or sprinkler system will automatically give an alert and will reduce the risk of extensive fire damage.