How Home Renovations Can Raise Home Insurance Rates

If you’ve been thinking about remodeling your home, it’s a good idea to consider how renovations might affect your home insurance rates negatively. According to, depending on the renovations you make, your insurance company could raise your rates. Let’s take a closer look at this idea.

Why Insurance Is Affected by Renovations
You may be wondering why renovations to your home can affect your home insurance rates. Well, if the value of your home improvesasa result of your work, the amount of insurance you may need for replacement costs could increase.

Think about it; if you buy and install granite countertops, you know that your home value will increase by thousands. As your home value increases, so should your home insurance coverage. You don’t want to go through the trouble of paying for these beautiful countertops only to have them destroyed in a fire without enough money to cover the loss.

Most people don’t know that 25% of remodeling efforts very often result in a 25% increase in home value. In other words, the more you change, the more you’ll need to insure.

Tips for Keeping Rates Low During Renovations
There are a few ways that you can help manage your insurance rates while renovating. They are:

  • Communicating with your agent to determine ways to manage the renovations in a less expensive manner.
  • If you’re hiring a contractor, ask for proof of workers compensation, as well as liability insurance. Your contractor’s insurance should cover items like uninstalled appliances, carpets and cabinets – not you.

But it’s good to keep in mind that increasing your own property insurance coverage limits even before you start renovations can help to save you money in the long run. For instance, your home insurance should cover building supplies you purchase. If you suffer theft or fire before you complete your project, you can recover your supplies without paying out of pocket again. Also, if a friend or family member who is helping your renovate gets injured, raising your coverage limits ahead of time could pay for medical bills.

The moral of the story is that home renovations and home insurance premiums are directly linked. So consider how your home insurance rates could be affected before and after you make adjustments to your home.