Three tips for insuring your house after a significant remodel.
Are you planning a substantial home remodel? Or perhaps you’ve already completed such a project? If so, you might be wondering how to ensure that your home is properly insured to protect your investment. We recently encountered this question from a client who was working on architectural drawings for a remodel in the range of $200,000 to $300,000. Here’s what we discovered:
1. Communicate the changes to your insurance provider. One crucial step in ensuring your newly remodeled home is adequately insured is to inform your insurance provider about the upgrades. Contrary to some misconceptions, most insurance companies do not require a new appraisal after a home remodel. Instead, you can simply reach out to your insurance company and let them know the extent of the work you’ve done. Whether it’s a $200,000 renovation or a more complex project, insurers have algorithms to determine the value of the added improvements and the extra coverage required. The key takeaway here is to avoid being underinsured, which could leave you financially vulnerable if disaster strikes.
2. Avoid over-insuring your home. While it’s essential to ensure you have sufficient coverage for your remodeled home, it’s equally important not to over-insure it. Insurance companies typically do not provide additional benefits for being over-insured. In the unfortunate event of a fire or other catastrophic events, you will not receive a higher payout simply because you had more insurance coverage than necessary. Therefore, aim for a balanced and accurate assessment of
3. Consider accessory dwelling units. Many homeowners are adding accessory dwelling units (ADUs) to their properties, whether for personal use or rental income. However, it’s crucial to be aware that not all insurance companies provide coverage for these additional units, and some may even drop clients who add ADUs without notifying them. Therefore, if you’re planning to construct an ADU or have already done so, it’s essential to consult your insurance company. Find out if they can insure the ADU and what specific coverage it might require. If your current provider does not offer coverage, explore alternative insurance options to protect your investment.
Protecting your investment starts with the right insurance coverage, so contact your insurance provider for guidance and peace of mind. If you have any questions about this topic, don’t hesitate to reach out by phone or email.