Whenever you improve your home, whether it's a full blown remodel or a do-it-yourself project, it's time to give some thought to your homeowners insurance. Does the work that you completed affect the amount of insurance you need? For example, installing a room addition will increase your rebuilding needs should your home be destroyed or damaged.
In addition to adding insurance coverage for home improvements, some of your projects can actually save you money on your annual premiums. For instance, if you recently installed a wireless home security system you may qualify for a reduced premium because your house is at a reduced risk for theft.
Which home improvement related homeowners considerations are there? Every home and policy is different however these top ten considerations are a good starting point.
1. Protect your tools
If you're an avid do-it-yourselfer, you probably have an extensive collection of tools. Did you know that your homeowners insurance will probably only pay a limited amount? Many policies place limits on valuable items including tools. If you have thousands of dollars worth of tools, your insurance may only pay $500 or $1000 in the case of a covered loss. Consider an insurance endorsement that increases coverage for your tools.
2. Protect your dwelling
If you've recently remodeled or added an addition to your home, your rebuilding costs will change. Your upgraded floors, counter tops, and cabinets may not be covered unless you update your policy. Likewise, the added square footage needs to be taken into account. Review your insurance policy to make sure that you have adequate dwelling coverage.
3. Protect your other structures
Did you just build a standalone workshop or art studio in your yard? Did you install a pool? What about the gazebo or cabana? Your coverage for other structures is usually limited to ten percent of the dwelling coverage. For example, if you have $200,000 in dwelling coverage, you have $20,000 in coverage for other structures. Is this enough to rebuild the art studio should something happent to it?
4. Liability protection
If you installed a pool or spa, you now have an added liability risk. What if someone gets injured in your pool? Consider increasing your liability coverage to protect your assets should tragedy occur.
5. Protect your landscaping
All those trips to and from the garden center will convince you that landscaping is expensive. If you've invested a small fortune in your landscaping consider a landscaping endorsement. Landscaping and trees are usually limited to five percent of the dwelling limit.
6. Protect your home business
As a home improvement guru, do you also offer your services to others? For example, do you operate a handy man business or a landscaping service out of your home? If so, consider adding home based business coverage to your policy and protect your business proper, liability, and loss of income.
7. Fire discounts
If you recently replaced your wooden shake roof with a fire-resistant concrete tile roof, let your insurance company know. You may qualify for a decreased premium. The same goes for replacing wood siding with fire-resistant siding. In addition, installing smoke detectors, fire sprinklers, and other safety devices may qualify you for further discounts.
8. Water wise
Homeowners insurance sometimes covers damage from broken pipes in the home however sewer backups don't count. This is messy business. Consider adding a sewer backup endorsement to your policy. In addition, if you install backflow devices, you may qualify for discounts.
9. Theft discounts
Did you recently install a security gate, deadbolts, or a home security system? Your theft deterrent efforts can also result in a decreased insurance premium. Let your insurance company know how your home is protected.
10. Prove your worth
Make sure to thoroughly document all home improvements as well as your possessions by keeping records and receipts in a safe location and performing a detailed home inventory. In the case of a loss, you will need to provide the insurance company of proof of your losses. Take photos or use a video camera to record everything you've done and store this documentation with your other records.
Home improvements add value to your home. They also might affect your homeowners insurance needs. Whenever you make an improvement to your home, take stock of your insurance policy to make sure that you are adequately covered or that you are getting the safety discounts that you are entitled to.
