Don't Forget to Give Your Home Owners Insurance Provider the Scoop on Your Renovations

Don't Forget to Give Your Home Owners Insurance Provider the Scoop on Your Renovations

If there are two things that summer's known for, it's renovations and road work. Most of us don't volunteer to have to put up with road work all summer long. Renovations, on the other hand, can be one of the coolest parts of a long, hot summer. Before you kick back this fall and congratulate yourself on a job well done though, don't forget to pick up the phone and let your home owners insurance know your property went through some changes.

Why Your Home Owners Insurance Renovation Plans Need to be Public Knowledge

The first question most people ask when you tell them they need to tell their home owners insurance provider about their renovations (especially when you mention the fact that it's smarter to do it before you start ripping down walls rather than after!) is why it matters. The thing is, when it comes to your home there are two people you definitely want to keep in the loop-your mortgage lender and your home owners insurance agent.

Renovations Raise the Value of Your Home

When you renovate your house you almost always raise its value. There wouldn't be much point in renovating if you didn't, would there? When you first purchased your insurance policy you were careful to insure it for its full value; however, if you don't declare your renovations and raise the level of your home owners insurance coverage your home is going to be underinsured. That means if disaster strikes and your home should be completely destroyed you'd never be able to completely reclaim the value of your investment.

With Home Owners Insurance, Renovation Might Not Be Part of the Package

Since the last thing you want is for your home to be uninsured right when it's the most vulnerable, you want to make sure you contact your home owners insurance provider as soon as you know a) what renovations are taking place, and b) what dates the renovation is scheduled to begin and end. During this time your insurer will be able to issue you what's known as a builder's risk policy-a home insurance policy designed to cover your house while contractors are ripping out walls and floors. A builder's risk policy will protect your home from start to finish; as soon as your renovations are done your coverage will revert back to a regular home owners insurance policy that reflects the added value of your home.

Renovations=Cheap Home Owners Insurance

Home owners insurance companies love renovated homes. Why? The electrical and plumbing systems are up to code, there's less risk of a fire hazard, and additional safety features (like a fence around your pool) make your home more insurance friendly. Guess what? Insurance friendly homes are much, much cheaper to insure.

But if you don't pick up the phone and let your home owners insurance provider know about your renovations, you might not be able to take advantage of any of it.

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