Does Homeowners Insurance Cover Home Renovations?

Home renovations are booming. People want more space, higher value, or just a fresh look. Whether it’s adding a room, upgrading the kitchen, or improving curb appeal, many homeowners don’t realize these changes can impact their insurance. 

We recommend thinking about how renovations might affect your homeowners insurance before you start swinging that hammer.

How Renovations Affect Your Homeowners Insurance

Let’s get straight to it: renovations change your home’s value. And when that happens, your insurance needs to reflect those changes. 

Adding a new room, upgrading a kitchen, or remodeling a bathroom? These are big changes that can increase your home’s replacement cost.

We always recommend updating your policy to match the new value. If you don’t, you could find yourself underinsured. Should disaster strike, the gap between your coverage and the actual cost to rebuild could fall on your shoulders. 

And remember, homeowners insurance isn’t just about the building—it’s about protecting what’s inside too.

Does Standard Homeowners Insurance Cover Renovations?

One of the most common questions we get is: “Will my standard homeowners insurance cover renovations?” 

Here’s the thing: it depends on the project. Smaller upgrades, like painting or installing new cabinets, often don’t require a policy change. But bigger projects? That’s another story.

Major renovations, like knocking down walls or adding rooms, can create gaps in your coverage. While your standard policy might cover your home during normal use, it may fall short when serious construction is underway. That’s why we recommend reaching out to your insurance provider before any big project kicks off.

What to Consider Before Starting a Renovation

Before you start a renovation, reviewing your insurance policy is a must. Renovations introduce new risks. We always tell our clients to think about potential theft, accidents, or damage during construction. These things can happen, and you’ll want to make sure your policy covers them.

Another important tip: let your insurance company know about your renovation plans ahead of time. Keeping them in the loop helps avoid surprises down the road, especially when it comes to coverage limits or exclusions. The last thing you want is to file a claim and find out you’re not fully covered.

Types of Coverage for Renovation Projects

When it comes to renovation insurance, you’ve got a few options to keep your home protected. Here’s what we typically recommend based on the size and scope of your project.

• Builder’s Risk Insurance: If your home will be vacant during construction, this is key. Builder’s risk insurance is a temporary policy that covers the home against damage, theft, and weather-related risks while work is ongoing.
• Liability Insurance: Got contractors on-site? Accidents happen. Liability insurance protects you from potential lawsuits if a worker is injured while working on your property.

Each of these options provides added peace of mind while your home is under construction.

Will Your Premiums Increase After a Renovation?

Here’s the truth—renovations can impact your premiums. It’s not always bad, but you should be prepared. 

Adding square footage or upgrading high-value areas like kitchens or bathrooms will likely increase your home’s replacement cost, which may raise your premiums.

However, not all renovations push costs up. Installing security systems or adding energy-efficient upgrades can actually lower your premiums. We recommend weighing the pros and cons of your renovation plans to strike a balance between added value and potential cost increases.

If you’re worried about premiums jumping too high, consider raising your deductible or bundling your home and auto policies for discounts. These strategies can help manage any potential increases.

What Happens if You Don’t Update Your Policy?

Not updating your policy after a renovation can cause major problems. If your insurance doesn’t reflect the new value of your home, you run the risk of being underinsured. That means if something happens, you may be stuck covering part of the loss out of pocket.

Even worse, not informing your insurer about a renovation could result in coverage gaps—or worse, void parts of your policy. We’ve seen it happen. 

That’s why we always tell our clients: Don’t leave things to chance. It’s much better to update your policy now than deal with costly surprises later.

Working with a Trusted Insurance Provider

Your insurance provider should be your go-to resource during any home renovation. We always recommend sitting down with your agent to review your coverage before, during, and after the project. This ensures you have the right protection every step of the way.

At Cavik Insurance, we take the time to get to know your specific renovation plans and offer personalized advice. We’ll review your policy, point out any gaps, and recommend the right types of coverage for your needs. It’s all about making sure you’re fully protected from start to finish.

Cavik Insurance Has You Covered

Home renovations are exciting, but they can bring added risks. Whether you’re expanding your home, upgrading a kitchen, or starting a bigger project, it’s essential to update your homeowners insurance to reflect the changes. Renovations affect your home’s value, your risks, and your insurance coverage.

At Cavik Insurance, we’re here to make sure you’re covered throughout your renovation journey. From policy reviews to advice on coverage options, we’ll help protect your investment and ensure you’re not caught off guard by any surprises.

Ready to get started? Contact us today for a personalized consultation. We’ll help you navigate your insurance needs, answer your questions, and provide the peace of mind that comes from knowing your home is fully protected. Let’s make your home renovation as smooth as possible—together. Reach out to Cavik Insurance today!