Do my home improvements affect my homeowners insurance?
Homeowners insurance will help guarantee that your home is protected from loss, but what happens if you want to make significant changes to your home? Most insurance policies will protect you and your home from anything short of earthquakes, floods and other acts of God, but it may or may not cover home improvement projects.
Home Insurance Coverage During Home Improvements
In most cases, additions to your home must be specifically added in to your homeowners insurance coverage, and that can be a process in itself. It usually involves contacting a building inspector to perform an inspection of your home to make sure that it is structurally sound and capable of supporting an addition. This will also require you to pull a permit before any project takes place.
Depending on what kind of home improvements you want to make, the replacement costs could increase by thousands of dollars. This is usually the case when you add large additions such as new bedrooms to your home. Such changes should always be reported to your insurance company. If you fail to do this, the cost of repairing your home may not be fully covered should disaster strike. Have your insurer recalculate the new cost of repairing your home after any additions are complete. Keep in mind that this could also raise your home insurance.
Most people think that taking on large home improvement projects will raise their insurance payments, but there are some projects that can actually lower your payments. It depends on your insurance provider, but adding things such as smoke alarms, shatter-proof windows, security systems and other projects that make your home safer could save you money on the long run.
One home improvement project that will definitely make your home safer and possibly lower your homeowners insurance is to replace your HVAC system. Most people imagine a furnace and an air conditioner to be more of a luxury than anything else, but there is much that an HVAC system can do for a home. Many people have outdated furnace and air conditioners whose electrical systems have not been updated. In some cases this can increase risk of fire and damage to a home. If your furnace or air conditioner is replaced by a reputable HVAC company they will ensure that everything is up to date with current electrical and mechanical code. Your home’s HVAC system can contribute just as much to its safety, so it could very well lead to lower insurance payments. Additionally, it can greatly improve a building’s air quality even when it is doing little to change its climate. Many modern HVAC systems are built with air purification systems that can remove potentially dangerous allergens from the air. They may also include whole home humidifiers that send moisture directly through a building’s ductwork to raise its humidity. Low humidity can cause a number of health problems, from uncomfortably dry skin to nosebleeds to severe allergies. Be sure to contact your homeowners insurance carrier if you do home improvements to see if they can lower your rates.
Other Perks of Home Improvement Projects
Not only do home improvements often lower insurance payments but they can also help with lowering energy bills. Home improvements such as new windows, upgraded insulation, and new furnace or air conditioning units make a big impact on monthly energy bills. In many cases the money saved on heating and cooling bills can pay for the improvements over a couple years. If done properly updating your home can save you big money in the long run. Having homeowners insurance can help protect your home and your family, but it always pays to know how your insurance payments could change with any home improvements.
By Frank Prestwood