Six DIY Home Renovation Projects that Impact Your Insurance

Before you ever pick up a hammer or call a contractor, you need to know how a home renovation can impact your insurance coverage.

Home renovations are common projects in the US, especially in recent years. In 2020, more than half of homeowners who renovated their homes belonged to the Baby Boomer generation. The next-highest percentage went to Generation X, with nearly a third of those who reportedly renovated their homes. 

While these generations may have more knowledge of home renovation projects, they also need to be familiar with how changes to their property can impact their insurance. An independent insurance agent can help you review your homeowners insurance coverage and how it may change after a major project. But for starters, here’s a breakdown of six common home renovations and how they can impact your coverage.

Six Home Projects and Their Effect on Your Insurance

When you make changes to your home, such as adding or removing an entire room, it can also cause your insurance needs to change. If you add something to your home and increase its value and/or square footage, you may need to increase your coverage limits as a result. But there are other ways that home insurance can be impacted by home projects that you should be aware of as well.

1. Performing Kitchen Renovations
If you’ve been envisioning a brand new kitchen, there can be some insurance considerations to factor in before you update your countertops or cabinets:

If you hire a contractor such as an electrician or plumber, you’ll want to make sure they’re legitimate and carry their own coverage. Ask for proof of contractor insurance and liability coverage before you allow them to start working on your home.
Ask your independent insurance agent if you’ll need to increase your homeowners insurance coverage or not. For renovations that increase the value of your home, you could end up without enough coverage if you don’t raise your limits.
If your friends will be helping you with renovation projects, talk with your independent insurance agent about potentially increasing your medical expenses coverage in case someone gets hurt.
Updating your kitchen can be extremely rewarding, it just might be a project that requires changes to your home insurance first. Make sure to review your home insurance with your independent insurance agent before starting on your dream kitchen. 

2. Conducting a Bathroom Makeover
Maybe you feel it’s time to update your bathroom, such as by adding a new claw foot tub, improved vanities, or changing out the floor and shower tile. Just keep these considerations in mind:

A professional plumber might need to be called in to help you move the location of your plumbing equipment, such as a drain, sink, or shower. If the worker damages your home with water while on the job, remember that your homeowners insurance won’t cover it. However, the plumber should carry their own coverage for such an incident, so remember to ask for proof of it upfront.
If you’ll be ordering a lot of new materials for your bathroom renovation that will be stored at your home before the project begins, keep in mind that you’ll need coverage for these things too. Ask your independent insurance agent about adding a builders risk policy to cover project materials that aren’t yet officially a part of your home.
An updated or upgraded bathroom can seriously increase your home’s value. Because of this, just make sure to check in with your independent insurance agent to update and upgrade your homeowners insurance coverage right along with your bathroom.

3. Converting a Room into a Home Office
Perhaps it’s time to turn one of your unused rooms into a functional space, and you’re ready to create that home office. While you’re not making a huge addition to your home for this project, there are still a couple of things to consider:

If your new home office will be storing a lot of equipment, remember that your home insurance policy often only includes a limit of $2,500 for this type of property. Ask your independent insurance agent about home business endorsements if you’ll be keeping more than this amount at your home.
You may need an entire business insurance policy if your entire business will be run from home and you’re self-employed, especially if clients or other business contacts will be visiting your property. If you’re working at home for another contractor, check to make sure you’ll be covered by the company’s policy as well as their workers’ compensation insurance.
Home offices can certainly be convenient and rewarding spaces, but they can also change your coverage needs. Double-check with your independent insurance agent if your existing coverage will no longer be enough if you start working from home.

4. Adding a Sunroom
Maybe you’ve always dreamed of being able to soak in the sun within your own home. While sunrooms can help you increase your Vitamin D intake year-round, they can also increase your home’s value or come with other important considerations, like:

You may need to increase your homeowners insurance coverage limits if you add an entire room to your home. A sunroom may increase your home’s value and square footage, so you’d likely need more coverage. 
Ask your independent insurance agent about potential savings on updates to your home insurance if you add a sunroom, such as those that can come with adding solar panels or energy-efficient windows. Creating a secure exterior door with an alarm system can also potentially score you a discount.
Again, if you’ll have materials for the sunroom sitting around your house before they’re installed, you might want to ask about getting a builders risk policy to guard against damage or theft to them before the project is completed.
Your new sunroom can provide a healthy, relaxing space in your home. Just make sure to check in with your independent insurance agent about potential required changes to your home insurance before taking on the task.

5. Finishing a Basement
Perhaps you’ve decided it’s finally time to clear out that dusty basement and finish it with carpeting, new rooms, or even a sump pump to prevent leaks. That’s a highly ambitious project that definitely requires you to check in with your agent about your insurance coverage, keeping these considerations at the forefront:

Ask your independent insurance agent about vacant home insurance if you won’t be able to stay at your home while the project is underway.
You may need to add water backup coverage, which is a typically inexpensive endorsement to home insurance, in case your home’s new sump pump ever fails.
If you’ll be adding rooms to your home, you may increase its value, and require more homeowners insurance as a result. Adding a home theater, game room, or extra bedroom can all accomplish this. 
Also ask your independent insurance agent if updates to your basement could save you money on your homeowners insurance. If you’ll be updating your home’s plumbing, wiring, or security, you could stand to gain some new coverage discounts.
A finished basement can provide a whole new space, or several new spaces, for you and your family to enjoy. Just know that with any changes you make, you may need to make changes to your coverage as well. Your independent insurance agent will know exactly which updates you need to make to your policy when you discuss your finished basement project with them.

6. Adding a Deck or Porch
Your family has decided it’s time to create a better outdoor space to enjoy the weather and fresh air, so you’ll be adding a deck or porch. This can be a huge project that comes with several necessary considerations:

You may need to apply for a deck permit for your home before making the changes. Check in with your local ordinances to be sure, before you start working. 
Make sure your health insurance is up to par before taking on such a task yourself, due to the possibility of injuries from falling off the structure, tripping over materials, or straining yourself during heavy lifting.
Ask for proof of insurance from licensed contractors before they’re allowed to start working in case of any mishaps.
Check in with your independent insurance agent about how adding a deck or porch may increase your home’s value or square footage and possibly require more home insurance coverage.
Your independent insurance agent can easily point out how you may need to change or update your existing homeowners insurance coverage if you’ll be adding a porch or deck to your home.

Insurance Considerations with Doing Renovations Yourself
If you’ll be doing these home renovations by yourself, it’s a good idea to review your liability coverage before you start. Liability coverage can help cover lawsuit fees if a third party, such as a friend helping you with the project, gets injured or has their property damaged while working at your home. You’ll also need to make sure to add builders risk insurance to protect expensive project materials before they’re installed against theft, weather damage, and more.

Taking on home renovations can be extremely rewarding in the end, whether you’ve hired someone to help or completed the project yourself. Feel free to dream big with your home’s final vision, just as long as you keep your independent insurance agent updated on your plans along the way. Your newly upgraded home deserves a newly upgraded homeowners insurance policy to adequately cover it.

Why Choose an Independent Insurance Agent?
Independent insurance agents simplify the process by shopping and comparing insurance quotes for you. Not only that, but they’ll also cut through the jargon and clarify the fine print so you’ll know exactly what you’re getting.

Independent insurance agents also have access to multiple insurance companies, ultimately finding you the best home insurance coverage, accessibility, and competitive pricing while working for you.