Home renovations are exciting and often increase your property’s value, functionality, and comfort. However, many homeowners overlook how these upgrades affect their insurance coverage. When you remodel, expand, or enhance your home, you’re also changing its replacement cost—the amount it would take to rebuild after a covered loss. If your insurance policy isn’t updated accordingly, you may not have enough coverage to fully restore your home in the event of damage or disaster.
How Remodeling Changes Your Home’s Value
Even minor upgrades, such as installing hardwood floors or modernizing your kitchen, can increase your home’s overall value. Major projects, such as adding a new room or finishing a basement, have a much greater impact on the cost to rebuild. These improvements increase both the structure’s worth and the need for additional protection. Without notifying your insurance provider, you risk being underinsured, meaning your policy may not cover the full cost of rebuilding your improved home after an unexpected event.
Updating Systems and Liability Coverage
Upgrading systems like plumbing, electrical, or roofing can actually lower your risk and, in some cases, reduce premiums, but they must be adequately documented. On the other hand, adding features like pools, decks, or outdoor kitchens can increase liability exposure. Ensuring your insurance policy reflects these changes helps maintain accurate protection for your property and everyone on it. By reviewing your policy before and after major renovations, you can prevent costly coverage gaps.
The Importance of Communication with Your Agent
Before starting any renovation, it’s wise to contact your insurance agent to discuss your plans. They can help you understand how construction might affect your coverage, advise on temporary policies if needed, and adjust your limits based on your home’s new value. After the project is complete, an updated appraisal or photos can help your agent confirm the new replacement cost, ensuring you’re fully protected moving forward.
Renovations can change your home’s replacement cost, risk profile, and liability exposure. When you update finishes, add rooms, or replace major systems, your policy should reflect those improvements so you’re not left underinsured after a loss. Stay proactive by reviewing limits, endorsements, and documentation before and after the work, keeping your protection accurate at every stage.
Keeping Your Home and Investment Protected
Your home is one of your most significant investments, and renovations are a great way to build equity and comfort. But to truly protect that investment, your insurance coverage must evolve alongside your improvements. Koda Insurance Services can help review your policy, make adjustments, and ensure every upgrade is covered. Call us today at (619) 600-5550 or complete our online form to keep your home—and your peace of mind—secure.
