Renovations and Insurance: Make Sure You're Covered
In all the excitement about the changes that renovating a property will bring, it’s quite easy to forget about insurance. And so it’s not unusual for people to start knocking down walls before they’ve spoken to their brokers or found out how the renovations will affect their policies. Unfortunately, not being covered for the renovation itself, or for any post-renovation valuation or structural changes could carry long-term costs. It could also render a home insurance policy invalid, which the homeowner may not find out about until they file a claim in the future. So, if you are planning on renovating your home, there are very important reasons for making sure that insurance is on your to do list.
Renovations and Insurance: When Should I tell My Broker?
Pick up the phone as soon as you begin making renovation plans. Before you start swinging a hammer, get in touch with your broker to discuss your plans and any major structural changes that may result from the renovations. Your provider will let you know if you are fully covered for the renovations or will need additional coverage, and if you will continue to be covered after the renovations.
What Does Renovation Insurance Cover Me For?
There are different coverage options depending on the size and type of the renovation. You might be covered under your existing policy or you may need additional insurance because of inherent project risks. Your policy may even need updating if the value of your home will increase after renovations.
Depending on the size and type of project, including how much risk is involved, you may need to get additional renovation insurance on top of your existing home policy. It is a good idea to go for additional coverage if recommended, even if you are hiring your tried-and-trusted contractor to do the work. Why? If you have ever watched a home renovation show you know that surprises happen during home remodelling. You might uncover underlying damage, structural issues or out-dated plumbing you didn't know existed. Plus, you could be liable for contractor injuries. This is a big one. If you have workers helping you with renovations, you could be held liable for any injuries incurred on your home or project site. Fortunately, renovation insurance can protect against personal injury liability, so make sure you are comprehensively covered so that you are not open to a personal injury claim.
Will Renovation Increase Insurance Rates?
A renovation could increase or decrease your rate or have no impact. It really depends on the type of upgrade or renovation. For example, if you are updating your home with more energy efficient facilities, it could lower your rate. If you are building an add-on or installing a pool, your insurance rate may go up along with the value of your property.
Renovation Insurance After Commencing or Completing Work
What if you started renovations but forgot to tell your insurers? In this situation, the best thing to do is talk to your insurance broker right away. They will discuss your options with you and try to work out a solution. That way, you can rest assured that you and your insurers are on the same page and working with the same set of facts, and you avoid the risk of your policy being effectively voided. Even after renovations have wrapped up, it is still important to notify your insurance provider, regardless of the fact you may have done so prior to starting renovations. They will confirm the post-renovation valuation of your home and make sure your policy reflects everything it needs to.