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Impact of High-End Home Improvements on Your Insurance

Room in a home being renovated

Home renovations are at an all-time high, and it's no wonder why: After a year of staying home or moving, people want to improve their space and adjust it to suit changes in their lifestyle, like how they work and study. Certain renovations can also enhance your home's design, square footage and curb appeal, upping its value. If you have the cash and the time, it sounds like a no-brainer—but before you go adding on that new big bathroom and home theater, you'll want to better understand insurance for homes under construction.

There are two stages in which your home insurance can be affected by renovations: as the work is being prepared or performed; and afterward, if your home has significantly increased in value.

Home Insurance for Renovations

If you're doing a major renovation that requires construction, some things you'll want to consider include:

Other coverage: Is your contractor suitably bonded and insured with general liability and business policies? If the work isn't up to par and causes water or other damage down the line, your regular home insurance may not cover all the costs. And if you live in a co-op or a condominium, what share, if any, will the homeowner's association's master policy cover, and what falls on you (especially if other units are damaged during or because of your renovation)?

Medical and injuries: If a contractor or helpful friend falls through the roof while working on your home, do you have enough liability or umbrella insurance to cover any claims they may make? Your regular homeowner's policy may max out in the event of a large claim, and you'll want to make sure you have enough to protect your assets, such as retirement accounts or your home itself.

Risks to unfinished projects: When a home construction or remodeling project is unfinished and open to the elements, it's much less secure than four walls and a locked door—especially if nobody's living there. So not only is the home more at risk for theft, it may not be completely protected in the case of natural disaster, flood, fire or other catastrophes that can damage the property or possibly put people in harm's way. If you do have belongings, tools or building supplies on-site, be sure to keep a detailed home inventory, advises the Insurance Information Institute.

Home Insurance After Your Remodel

If you've just added wallpaper or planted spring flowers, chances are your policy won't change much. But when your renovations are more significant—perhaps you've added a room or two, or new walls that enable you to hang more valuable art—they can change the coverage amount you'll require.

If you've installed a hot tub, for example, your liability risk may go up—though upgrading your security or fire-prevention measures during your remodel can actually work in your favor when it comes to paying for your policy.

Bottom line: You'll love your home even more as your dreams for it take shape. But to make sure you're properly protected, connect with a Westfield Agent to discuss Wespak Estate, a combination policy that considers your high-value home, your vehicle and your peace of mind.