Planning or have you done a home renovation? Having a heart-to-heart with AIC Insurance may not be part of your preparations. But it should be. “A renovation may affect the value of your home or the liability issues,” says Don Griffin, vice president of personal lines at the Property Casualty Insurers Association. “Anything that changes the structure or use of the property can change your policy.” Many house improvements that boost your home’s value could render your home insurance coverage inadequate and leave you vulnerable to losses. Other upgrades may trigger lower premiums — savings you don’t want to miss simply because you didn’t call your insurer. “When making improvements to your house, it’s a good time to have an insurance conversation to get enough coverage and possibly discounts,” says Richard Hutchinson, a general manager at Progressive Insurance.
Here’s how some common home upgrades or repairs can affect your homeowners insurance policy, both positively and negatively.
A new roof may not be the most attractive home improvement, but it sure can save a lot of cash when it comes to homeowners insurance, cutting your premiums by 10 percent to 20 percent. “The roof is probably the single biggest factor affecting your policy,” Jim Towns, Allstate, says. “That’s where the majority of losses due to snow, wind, hail and rain occur.” Some homeowners can get even bigger discounts if they live in hurricane-, wind- or hail-prone states. Make sure to get a contractor’s invoices to our office when the work is completed!
A pool may make you the most popular house on the block, but it means your home is the riskiest, too, from an insurance standpoint. “This is what our industry calls an ‘attractive nuisance,'” says Griffin. “Everyone in the neighborhood wants to play in your pool. It increases your exposure to loss.” The standard policy usually comes with $100,000 in personal liability protection, which would cover medical costs for a person injured in your pool and any legal expenses if you’re sued. However, an insurer may recommend that a pool owner opt for at least $500,000 in liability coverage. Your insurer also may require a fence around the pool with a lock to cover the newly built liability.. If the pool has a diving board or slide, it will be considered an even greater potential hazard. “The ratio between fun and risk is high,” Hutchinson says. “The cool stuff will cost you more.”
Office for a home business
Say you want to go full time making reclaimed-wood furniture at home for your Etsy site. Will your home insurance cover the assets of your newfound business? Most homeowners policies protect equipment for home-based businesses, but only up to about $2,500, says Hutchinson. That might not be enough for a business owner who uses specialized machinery or stores large amounts of supplies or inventory. “It could be as simple as adding an endorsement. That’s particularly true if your business is the type that creates heavier foot traffic in your home — such as piano lessons or private yoga sessions. The risk increases that you could be sued by a client or customer. The good news: If your business doesn’t bring visitors to your home and requires little equipment or supplies outside of a basic computer, your existing home policy should do the trick. But it’s best to call AIC Insurance Agency first to make sure.
More living space
Sometimes a home needs to grow to accommodate an expanding family. That can mean adding more livable square footage where none existed before, such as in a dank basement or humid attic above the garage. In other instances, a new addition may be in order. Your insurance will need to be altered to account for the value of the new space, in case a catastrophe strikes. “If you add 1,000 square feet to a home, it could add anywhere from $100 per square foot or more to your home,” says Hutchinson.
Let AIC Insurance Agency, know about any major addition even before you begin, says Towns. “Say you put on a room addition and three-quarters of the way through, a fire destroys it,” he says. “You want that to be covered.” You may need to consider other types of coverage for the newly built-out areas of your home. A finished basement with new carpet, drywall and insulation may need water backup coverage if the sump pump is located there.
Have you had any work done?? You realize that sometimes a simple discount of a bundled policy could also bring your home insurance down.
Remember to call AIC Insurance and speak to Rebecca when you are considering renovations.