Renovations can revitalize a rental property in a number of ways, such as adding more square footage, remodeling a kitchen, or finishing a basement. However, a lot of property owners prioritize contractors, design decisions, and budgets over landlord insurance coverage. Because renovations can change a property's value and the risks it poses, your insurance policy may need to be adjusted to keep you safe.
Insurance During Renovations
Before starting any renovation project, speak with your insurance provider. Standard home insurance policies often cover minor updates, but large-scale projects—such as structural changes or additions—can create new risks.
For example, some insurers require extra coverage for renovations, sometimes known as a "renovation endorsement," because your home may be more susceptible to theft, fire, or unintentional damage during construction.
This option can guarantee that temporary living expenses are covered if the house becomes uninhabitable, protect materials stored on-site, and cover liability if a contractor or visitor is hurt.
Additionally, contractors need to have their own workers' compensation and liability insurance. Always confirm this before hiring, as any coverage gaps could result in financial responsibility for you.
Adjusting Coverage
Reevaluate your policy limits as renovations proceed to make sure they still accurately reflect the rising value of your house. For instance, upgrading with high-end materials or adding a new bathroom can increase the cost of replacement. You may be underinsured in the case of a loss if your coverage stays the same.
Additionally, you might need to include particular kinds of coverage, like:
- Builder's risk insurance: Provides coverage for material and structural damage during construction.
- When a house is vacant while renovations are being done, vacancy coverage guards against potential dangers.
- Extensions to personal property: Guarantees coverage for recently acquired fixtures or appliances.
Reviewing these options with your insurance provider before and during the project will help prevent unexpected gaps.
Post-Renovation Insurance Evaluation
Once renovations are complete, a final insurance evaluation is crucial. Inform your provider of the finished work so they can update your policy to reflect the home's new value and features. This ensures adequate protection against future losses and provides peace of mind.
It's also a good time to review deductibles, liability limits, and any discounts you may qualify for—such as improved fire safety due to updated wiring or the installation of a security system.
You can streamline the process and ensure accurate valuation by giving your insurer the renovation-related receipts, pictures, and permits.
Homeowners can safeguard their investment and peace of mind by being proactive with insurance both during and after renovations.
Protect Yourself with Landlord Insurance
Are you looking for an excellent price on landlord insurance? Contact our team today! As independent brokers, we will shop the market to find you the best deal on quality landlord insurance!
Call American Insuring Group today at (610) 775-3848 or contact us online to start saving.
