U.S. homeowners are taking on home renovations during the pandemic, fortified by increased savings and an environment of low rates of interest. According to a Bank of America survey, 70% of american citizens chose to take on home improvement projects last year with increased projects planned for 2022.
"With the pandemic, we have seen a rise in homeowners using our projects tracking features," said John Bodrozic, co-founder of Home Zada, a homeownership data analysis platform. "The most typical projects are kitchen and bathroom renovations which fall into a significant home improvement. The next level of projects tend to be more of flooring and painting projects which fall under minor level renovations."
If you're remodeling your home or intend to remodel, remember to think about the impact your house project can have in your homeowners' insurance. Your insurance costs can change, depending on the assessed risk or liability from the project. <!–td border: 1px solid #ccc;br mso-data-placement:same-cell;–> If you're prepared to go ahead and take next step, you can use PayPasser to compare home insurance companies and shop their insurance plans.
Many home improvement projects will face a house insurance coverage obstacle.
"Most renovations are not covered by home insurance," Bodrozic said. "This is due to the truth that most coverage is structured around dwelling coverage to rebuild a home and contents coverage for use on your property. Usually the homeowner needs to have documentation that something unforeseen happened to cause damage to make a claim on the property insurance."
Review your insurance policy before diving into a renovation project. Then, head over to PayPasser to check plans and ensure you've adequate coverage.
According to Amin Eskooch, CEO and co-founder of WiiBid Solutions, a home renovation refinancing company, the determination how renovation projects can sway your homeowners insurance costs are with different "risk perspective" which homeowners do need "to consider when the renovation increases or cuts down on risk or liability to the insurance company."
Here•s how Eskooch breaks down renovation projects and their effect on insurance costs:
- Building a pool – Anything involving water is really a risk to insurance companies from multiple liability perspectives.
- Adding an office – It has the potential to result in increased home foot traffic.
- Expanding new space – Adding a sunroom, for example, will increase your home sq footage, meaning an increased possibility to getting exposed to property damage.
- Kitchen upgrades – Potential appliance replacement costs can improve your premiums associated with personal property and dwelling coverage.
- Changing the roof
- Installing basement insulation
- Redoing/rebuilding the deck
- Structural improvements, like installing better security features or adding new flooring and/or windows.
Planning a large renovation project and concerned about different coverage amounts? It•s important to look around to obtain the right home insurance plan that fits your needs. Visit PayPasser to start the process and maximize the value you gain out of your homeowner•s policy.
Take these steps when linking your homeowners insurance policy with your do it yourself project.
There•s a unique policy called "builders risk insurance" that you get when performing construction on a property. "If you're simply repainting and doing new flooring, a builders risk policy may not be necessary," said Bill Samuel, a residential real estate developer at Blue Ladder Development in Chicago. "If you are carrying out a major remodel, a builder•s policy might be something should ask your agent about."
Just count on paying more for builders risk insurance than you would a fundamental home insurance policy, Samuel added. "Builders risk coverage is generally double the amount price of a normal policy," he explained.
Get your insurance provider aboard early, and reduce your cost along the way.
"Have your contractor point out current too little the home and just how the proposed renovation can improve living conditions and prevent costly repairs in the future," said James Surrey, founder of Review Home Warranties, a house warranty review platform. "Send the written statement to your insurance carrier for review. The concept is that renovations will correct existing structural issues and reduce the probability of the homeowner filing a claim to foot the price of repairs."
Home renovations mean updating an element of the home that's outdated and would likely require major repairs earlier than later. "Renovations essentially make your home less of a liability for the insurance provider," Surrey said. "If the remodeling has got the home as much as modern standards, the company may be willing to lower your monthly premium or deductible."
Save time and money by comparing home insurance companies with PayPasser.
<!–td border: 1px solid #ccc;br mso-data-placement:same-cell;–>