When deciding the monthly premiums for your home insurance policy, your insurer has to consider multiple factors. However, with time, you may feel the need to improve your home for a better living experience. What most homeowners do not know is that such improvements can expose them to uninsured risks. Here’s how home improvements change your premiums and what you should do after such enhancements to keep things in check
1. Effects of Home Improvements on Insurance Premiums
Once you improve your home, you either increase the property’s value, increase the likelihood of peril, or protect the property from risk. Based on the following three scenarios, your insurer may increase or reduce your monthly premium.
Home Improvements That Increase Your Premiums
At some point, you may decide to expand the size of your house, upgrade your kitchen space, or even redesign your bathroom. Such improvements increase the value of your property to an amount exceeding the sum insured. Increasing the value of your property means increased your monthly premiums.
You also attract higher monthly premiums on home improvements that your insurer considers risky. For example, you may decide to spice things up with a private pool. While this increases your property’s value, your insurer may increase your monthly premiums to bolster your liability cover.
Home Improvements That Reduce Your Premiums
Depending on the nature of your home improvements, your insurer can also reduce the amount you pay in premiums. You can decide to renovate your roof or install one that is resistant to disaster. You can even choose to have a locking fence around your pool or install a protective cover. Such improvements are likely to reduce your monthly premiums as they reduce the likelihood of peril.
2. What You Should Do Before Home Improvement Projects to Be Safe
Before starting on any home improvements, you need to contact your insurer. Whether it is a simple addition or a major renovation, your insurer should let you in on its effects on the value of the property. Failing to notify your insurer of improvements may lead to underinsurance.
Almost all home improvements change insurance premiums. Let’s face it; there’s still a chance that you made some home improvements without notifying your insurer. It is not too late. Be sure to contact Vargas & Vargas for guidance on the best way forward. We are a premier local insurance agency that places your interests before those of your insurers. We work for you only and will help you find the best insurance coverage for your needs.