Does Home Insurance Cover Home Improvements?

Does home insurance cover home improvements? Everybody loves to renovate. Making your home more styled to you, showing off your attitude through the home that you live in. Maybe you just need more room for a growing family or possibly need an office to work from home.

Perhaps the house was damaged in the last act of Mother Nature. It does not really matter why you need to remodel or rebuild; and what matters is that you will get it done one way or another.

Does Your Home Insurance Cover Home Improvements?

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A question that comes up is whether or not your home insurance will cover the home improvements. That is to say that after you have the work done; will your current insurance plan cover any damages that may occur.

This will obviously be left up to what the contract says and what the agent tells you; but there are some things that you need to keep in mind and some that you should find out before starting any large project.

Who Is Doing The Work?

The first thing you need to consider is whether you will be doing the work; or planning to hire a professional contractor to do the job. The second choice is usually the best because when a licensed contractor does a renovation on your house; they will have a home insurance policy that will cover any damage that they may do. It will also cover them if the workmanship ends up being shoddy or horrible.

Either way, the contractor will be responsible for refunding your investment; or coming back and making it suitable on their dime rather than yours. If you decide to do it yourself; then you may want to consider adding a renovation insurance plan to your homeowner’s policy.

Contact Your Insurance Provider

The next step you would want to take is to talk to your insurance agent. You need to let them know your plans so they will not be surprised by the home value increases. Plus, they can guide and inform you about what they would cover, what they will not cover; and if you need more insurance coverage to cover your home after the renovations are done.

Current Homeowners Insurance Policy

Your current insurance plan will also have a lot to do with your renovation. As you know, a homeowners insurance policy will cover any damage done to your home; when any of the identified incidences happen. When you add to your current home or make significant changes; your current home insurance policy may not cover the fees to replace what you are building.

You also need to consider that if your changes add value to your house; it may become rated at over the amounts you have the policy set for. You will want to look into this and possibly add more coverage to ensure that; you are completely covered if something should ever happen.

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Areas To Be Aware Of

Some specific renovations will increase the home’s value; which may require a different policy to be added on, or maybe you can modify your current one. These are crucial areas to know about; because when you want to know how much is home and contents insurance, these areas will increase the values.

Either way, here are the areas that will cause you some headaches regarding your current home insurance.

  • Kitchens
  • Bathrooms
  • Pools
  • Flooring
  • Square footage increases

Settle Claims First

It is important to remember that if you are rebuilding, or renovating, because of damage done to your house; you need to get in touch with your insurance agent and get a claim filed. It may be a pain to jump through their hoops, but to cover the damage with a payout; you will need to leave things as is until they have had a look at it or they have had you send them detailed photos of it.

They will pay the damage value to you at the current rates; or at the amount you set when you first obtained the insurance. This amount is all you will be getting, so if your building costs more than that amount; you will have to pay for it out of your pocket or get a loan.

You also need to remember that you will have to pay the amount they set your lot at; so do not forget about that. If you do not cover that amount, your insurance company can refuse to give you any type of settlement.

Self-Renovation

If you are doing the work yourself, you will want to find out if your policy covers it; and if not, you will want to add to the policy to make sure that it does. Doing the work yourself will save a ton of money; but it could cost you more in the long run unless you know what you are doing.

Before trying any projects on your own, make sure you have a plan, have received any permits that may be needed; and have all the materials on hand, so you do not have to stop in the middle of the project.

Outside Damage

If any damage should happen to an adjacent building; like the neighbor’s house or garage, you will have a couple of decisions to make. First off, the neighbor would have to file a claim against their own homeowner’s insurance. From there, one of two things will occur.

The first will be if your contractor caused the damage, the neighbor’s insurance company will go after the contractor’s insurance. If you are doing it yourself, their insurance company will work with your insurance company to pay the amounts needed.

If your homeowner’s home insurance does not cover the costs, you can expect to be sued by the neighbor; their insurance company, or both.

Conclusion

That is a basic explanation of the question asked “Does home improvement cover home improvements?” at the beginning of the article. If you just wanted to know if you could file a claim to build; the answer would be a resounding “no”. Insurance companies will not let you file a claim without cause; and just because you want another bathroom is not good enough justification for an insurer to pay out on.

Images by Tumisu and Rudy and Peter Skitterians

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