Should I tell my insurance company about home improvements?
Update your insurance coverage after the renovation Make sure that your insurance company knows about the improvements to your home. After a major renovation, you may need to increase the amount of insurance you have to rebuild your home.
The Impact of Home Improvements on Home Insurance Premiums
Homeowners often invest money in projects to improve their property, but they might not realize the effect these projects can have on home insurance premiums. Home improvements have the potential to both raise and lower insurance premiums, depending on the type of project that is completed.
One way home improvements can bring down insurance rates is by reducing the risk of a home suffering physical damage. Enhancing key elements such as the roof, windows, locks, and HVAC system can reduce the chances of a home being destroyed by weather, burglary, or failure of mechanical components. Insurers will typically offer lower premiums for homes that are less vulnerable to destruction.
Additionally, smart home improvements can also create a sense of security for insurance companies. Smart technology such as surveillance cameras or smoke detectors can make a home far less prone to theft or fire, which would drastically reduce the risk of the insurer needing to pay out on a claim. Having such advance warning increased safety can often convince insurers to lower premiums.
Unfortunately, there are also some home improvements that can lead to an increase in insurance premiums. If a home is situated in a risky environment, expensive features installed as a luxury might cause insurers to increase the premium. For instance, a swimming pool could substantially raise home insurance premiums due to its added risk of injury to a family member or destruction due to unexpected weather events.
In summary, making home improvements can be beneficial in a variety of ways, but they also have the potential to cause homeowners to pay higher insurance premiums. If homeowners are considering home improvements, they should be sure to check with their insurer to determine how it could affect the premium.