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Article: Home renovation tip - Consider adjusting your home insurance policy when doing home renovations

By: Kade Phillips, contributing writer at kanetix.com.

Home renovations can be exciting, but . . .

You have a vision of how you'd like your home to look after the renovation. It's merely a matter of finding someone to do the job and your vision can take form. But, often calamity strikes when we least expect it. When you're having work done on your house, many things can happen that could put you and your family at financial risk if you don't take measures to prevent it. One nasty slip of a hammer or slip of a power saw can be enough to throw your affairs into jeopardy.

Yet, many people fail to realize the inherent risks for which they're responsible when they're having renovations or remodeling done on their home or condo. Amazingly, millions of homeowners leave themselves vulnerable to potential financial disaster. In fact, according to recent surveys, up to 40% of homeowners who have renovated or remodeled their homes failed to update their property insurance policies. When you own a home, there's always a bit of risk. But, home insurance is supposed to mitigate that risk. Below, we'll discuss how your assets may be in jeopardy, potential problems during renovations and updating your insurance policy when you're doing the work yourself.

Reasons to adjust your home insurance

Whether you're adding a porch outside, a deck in the backyard, or installing kitchen cabinets, you should always speak with your insurance company to determine if you need to adjust your policy. Whenever you add to or extend your home, you increase its value. If something happens to your home after you've made the addition, you want to ensure you're covered for the increased amount of your home's value. If you don't adjust your homeowners insurance policy and something horrible happens, you'll only be covered up to the amount of your home's prior value.

The second reason to adjust your policy is to protect your financial assets in the event someone is injured while working on your home. Often, the contractors you hire will have workers' compensation insurance. It's purpose is to protect you from claims made in the event one of the contractors is injured. But, you need to make sure they have the insurance. Ask the people who are working on your home if they're properly covered. Similarly, contractors should have liability insurance. This will protect you in the event a contractor does something that causes damage to your home during the renovation.

Some contractors are not properly insured. There are also times when the contractor has insurance but he's subcontracting a portion of the job to someone who isn't covered. If that's the case, you need to adjust your policy to protect yourself in the event of an accident that causes injury or damage. It only takes one unfortunate accident to wreck your finances and your hopeful expectations.

Doing the home renovations yourself

Many people want to work on their home renovations themselves. If you decide to travel this route, you'll still need to make sure your home insurance policy protects you. If you're having someone help you renovate, the liability part of your normal policy should cover any potential injuries. If there's a chance that an injury could exceed the amount of your liability coverage, you should consider getting an "umbrella" policy to protect your assets.

Updating your home insurance policy

Perhaps the most important thing to consider is this: if you don't let your property insurance company know about the renovation, and something awful does happen, you may be denied the coverage you were expecting and paying for, because you failed to advise your insurer of a change in the material risk.

Don't leave yourself vulnerable to financial loss when you're having home renovations done. Call your insurer and tell them what you're having done. It's possible that your current policy will sufficiently cover any minor remodeling work you're doing. But, you need to make certain to avoid nasty surprises later. If you're hiring contractors, make sure they don't start any work until you've seen the proof that they're insured. If they're not, you'll need to adjust your policy. A simple phone call can end up saving you from financial disaster. Millions of people fail to make the call. Don't make the same mistake.

While on the topic of updating your home insurance policy - you may be interested in finding out if you are currently paying a fair price. It's amazing just how much premiums can vary for essentially the same coverage. Why not take a moment to compare your property insurance costs with other offers from competing insurance companies. You could be very pleasantly surprised at what you find. Click: Low cost home insurance to get started.


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