Home renovations can be exciting. Whether you’re upgrading your kitchen, finishing a basement or adding more space, these improvements can increase your home’s comfort and value.
But there’s one thing many homeowners overlook during the process — how those renovations impact your home insurance policy.
According to a study by Houzz Research, at least 90 percent of homeowners plan on moving forward with a home renovation project this year.
If you’re planning updates or already in the middle of a project, here’s what you should know to make sure your coverage keeps up.
Why Renovations Can Change Your Insurance Needs
Not all renovations are created equal. Some upgrades may increase your home’s value, while others can introduce new risks.
Insurance companies base your coverage on factors like your home’s replacement cost, structure and overall risk level. When those change, your policy may need to change too.
Failing to update your policy after renovations could leave you underinsured or without coverage in certain situations.
Renovations That May Increase Your Coverage Needs
Certain home improvements can raise the cost to rebuild your home, which directly impacts how much insurance you need.
Examples include:
- Kitchen remodels with high-end appliances or materials
- Bathroom upgrades with custom features
- Home additions like extra bedrooms or living space
- Finished basements or upgraded flooring
If your home’s value increases and your coverage doesn’t, you may not receive enough to fully repair or rebuild after a loss.
Upgrades That Could Lower Your Risk
Some renovations may actually help reduce your insurance risk — and in some cases, your premium.
These include:
- Replacing an old roof
- Updating electrical or plumbing systems
- Installing a home security system
- Adding storm-resistant windows or materials
While savings aren’t guaranteed, these upgrades can make your home safer and more appealing to insurers.
Renovations That May Increase Liability Risks
Not all upgrades are about structure — some can increase your liability exposure.
For example:
- Adding a swimming pool
- Installing a trampoline
- Building a deck or outdoor entertainment space
These features can increase the chance of accidents, which may require higher liability coverage. In some cases, your insurance company may require additional protections, like fencing around a pool.
What About Renovations in Progress?
Coverage during a renovation can get tricky.
If you’re doing minor work yourself, your existing policy may still apply. But for larger projects, especially those involving contractors, you’ll want to take extra steps:
- Make sure your contractor is licensed and insured
- Verify they carry liability and workers’ compensation coverage
- Notify your insurance provider before major work begins
Some policies may limit coverage during extensive renovations, especially if the home becomes temporarily unoccupied.
Don’t Forget to Update Your Policy
One of the most important steps is also the simplest — tell your insurance provider about your renovations.
Even if the updates seem minor, keeping your policy current helps ensure:
- Your home is insured for the right amount
- New features are properly covered
- You avoid surprises during a claim
Waiting until after something happens can lead to gaps in coverage that are difficult to fix.
The Bottom Line
Renovating your home is a great way to improve your space and increase its value. But those changes don’t just affect how your home looks — they also affect how it should be insured.
Taking a few minutes to review your coverage before and after renovations can help protect your investment and give you peace of mind.
If you’re planning upgrades or just want to make sure your policy still fits your home, you can start a free quote today with Shop Insurance USA to secure the coverage you deserve.