Neuza B.
Thinking about remodeling your kitchen or finishing the basement?
Home renovations can increase the value and enjoyment of your home—but they also impact your homeowners insurance in ways many people don’t expect.
Do you need to notify your insurance broker or company before or after the work is done?
Homeowners are often surprised to learn that failing to report certain upgrades can lead to coverage gaps, claim delays, or even denied claims.
Here’s what you need to know before you renovate.
In this guide, we’ll explain how home improvements affect your insurance, which upgrades require a coverage review, why hiring the right contractor is critical, and how to protect your investment from day one.
Why Renovations Impact Your Home Insurance
Your homeowners insurance policy is designed to reflect the current value and condition of your home. When you upgrade your property—especially projects that boost value or add livable space—you’re changing your home’s risk profile.
If your policy isn’t updated, you could end up underinsured
if something goes wrong.
For example:
- Adding a bathroom increases your rebuild cost
- Finishing a basement may require enhanced water damage coverage
- Upgrading a roof may qualify you for a discount
- Installing a pool introduces new liability exposures
The bottom line: if you make major improvements, your policy should reflect those changes.
Which Renovations Require a Policy Review?
A new coat of paint isn’t a big deal—but these projects should absolutely prompt a call to your insurance agent:
1. Kitchen and Bathroom Remodels
These are high‑value spaces and significantly affect your home’s replacement cost. If you upgrade appliances, counters, cabinets, or plumbing, make sure your dwelling coverage
increases accordingly.
2. Room Additions or Finished Basements
Any increase in square footage increases your rebuild cost. Whether it’s a new home office, sunroom, or finished basement, updating your coverage is essential.
3. New Roofs or Window Upgrades
Storm‑resistant upgrades may qualify you for premium discounts. Don’t miss out—notify your agent.
4. Decks, Fences, Sheds, and Detached Structures
These typically fall under Other Structures
coverage (usually 10% of your dwelling limit). If your upgrades cost more than that, you may need to increase your limit.
5. Pools, Hot Tubs, or Outdoor Living Spaces
These improvements add value but also increase liability risk. You may need higher liability limits or an umbrella policy.
Why Hiring a Licensed and Insured Contractor Matters
One of the biggest dangers during renovations is hiring an unlicensed or uninsured contractor. This is a major risk many homeowners overlook.
If a contractor is uninsured and something goes wrong, YOU could be liable—not your homeowners policy.
Before any work begins, always request:
- Proof of General Liability Insurance – covers accidental property damage caused by the contractor.
- Workers’ Compensation Insurance – protects you if a worker is injured on your property.
Hiring unlicensed or uninsured contractors can lead to:
- Denied insurance claims
- Costly lawsuits if someone is injured
- Code violations or unsafe workmanship
- Out‑of‑pocket repair expenses
Never rely on verbal assurances. Get documentation and keep copies for your records.
When to Call Your Insurance Agent or Broker
The best time to contact your insurance agent is before the renovation starts. Your agent can help ensure:
- You have the right coverage during construction
- Your updated home value is fully insured post‑renovation
- You’re protected against new or increased risks
- You know whether you need a builder’s risk policy
- Your contractor meets licensing and insurance requirements
Even reputable contractors can have expired or insufficient insurance. Always double‑check their credentials.
What Happens if You Don’t Update Your Policy?
If your home is underinsured after a renovation, your policy may not fully cover a loss. You could be responsible for the difference between your coverage limit and the actual rebuild cost.
Unreported upgrades may also complicate claims—especially if adjusters cannot determine when or how renovations occurred.
Protect the Home You’re Improving
At Vargas & Vargas Insurance, we know how much work goes into improving your home. Our job is to make sure your insurance keeps up—during construction and after your project is complete.
Whether you're planning, mid‑project, or recently finished a renovation, we’re here to help.
Call us at (617) 298‑0655 or email customerservice@vargasinsurance.com for a free, no‑pressure policy review. Let’s make sure your investment is protected now and for years to come.
