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Renovating Your home? First Renovate Your Insurance

Is a home renovation at the top of your to-do list? According to Angi, Americans spent an average of $8,484 on home improvement projects in 2022, with painting, bathroom remodels, flooring, smart home devices, kitchen do-overs and landscaping the most popular projects.

As mortgage rates continue to rise, homeowners are opting to fix up their existing home rather than buy a new one. Giving a house a facelift and adding amenities that fit your lifestyle can make a space more comfortable, functional and energy-efficient.

However, before you get too carried away with the idea of a designer kitchen or luxury bathroom, spend some time researching projects, getting estimates and exploring your financing options.

You’ll want to ask your insurance agent about the impact of a renovation on your home insurance. You should also check to see if the contractors you plan to hire are licensed, bonded and insured.

Is your new project covered?

Your homeowners’ insurance covers the value of your home. But once you make improvements, its value will change — and so should your insurance coverage.

The Insurance Information Institute recommends talking to your insurance agent before you start any project. Tell them what you’re changing so they can estimate your home’s new value and upgrade your coverage before the work even begins. 

That way, if something happens while you’re still building — like a rogue tornado or a hailstorm — you’ll be covered right from the start. If you wait until afterwards, your new renovation might not be covered if you need to make a claim.

Generally, you’ll need enough insurance to replace 80% of your home’s value. Make sure your policy also covers theft or damage to building materials stored on your property.

Is your contractor covered?

The Occupational Safety and Health Administration classifies construction as a “high-hazard industry.” Life-threatening risks include falls, electrocution, exposure to toxic materials and injuries from equipment. It’s very important, then, that you hire contractors who are properly insured.

Check to see if they have workers’ compensation and general liability insurance. Workers’ comp covers employees when they’re hurt on the job. Liability insurance covers property damage and injuries they do to others, such as someone in your family.

An uninsured contractor could sue you if an accident occurs on your property and it’s considered your fault. Your homeowners’ policy may offer some protection, but ask your agent if you need to extend your policy’s liability limits. If you do, you may be able to get what’s called a personal umbrella policy, which is a type of insurance that helps pay when your homeowners’ policy is exhausted. 

Keep your home safe

The best way to avoid accidents is to reduce their likelihood of occurring. You can do that by hiring experienced contractors and removing safety hazards from your home. Look around your house to see if there are any dangers. Are there toys that someone might trip over? What about an overly rambunctious pet?

Making your property safe will protect your wallet, your family and the people coming to work for you. At the same time, make sure your homeowners’ policy is up to date and your contractors are adequately insured.

Connect with a Westfield agent for help with your homeowners’ insurance needs.