Home Renovations: How does this affect insurance?

Owning a home is much more than just paying off a mortgage. If you want to protect your investment, you should maintain it, update it and– yes– insure it! While your current level of coverage may be appropriate for your home as-is, renovations can actually impact the type of policy you need and how high your premiums will be. Keep reading for ARC’s five reasons to assess your home insurance needs before anyone swings a hammer.

Less is more…affordable

You may have always dreamed of adding an additional living space or a new amenity to your home, but it is important to consider all the consequences. Often these choices mean you and your property are at a higher risk of experiencing loss– should it happen, it will also cost more! Adding value to your home is wise, but it may cause your home insurance premiums to rise.

Make safe bets

Thankfully, there are numerous improvements you can make to your home that can actually lower your home insurance premiums. A roof upgrade or a new electrical system are just two examples of these beneficial renovations. One risk of these major renos is that you might uncover new or worse problems– in most cases, it is better to address these problems rather than live in denial. Gaps between the condition of your home and your insurance policy could mean certain losses may not be covered.

Statistics matter

Even if all your family and friends are Olympic-caliber swimmers, there is little you can do about high insurance premiums for a home with a pool. Some security features and habits can qualify for lower rates, but ultimately the statistics say it is dangerous to have a deep body of water on any property. While you may have calculated every reno and utility cost for a pool, make sure you know the consequences for your insurance policy.


If your renovations will result in a portion of your home being used for business purposes, your current insurance policy is likely insufficient. In most cases of “use-of-home-as-business,” you will be financially liable for any losses that occur to the business portion of the home. In these cases, you may want to price out business insurance policies for your peace of mind.

Buyer Beware

Did you know that even with a fully insured contractor, the homeowner may still be liable for injuries or damages that occur during renovation? Did you know that spending enough consecutive days outside of your home can void entire portions of your home insurance? These are just two common pitfalls that await those that do not review their policy before renovating.

Like renovations at large, this article could be overwhelming to some– especially if any of these catch you by surprise. If you have concerns or questions about your reno project and its impact on your home insurance, contact ARC today!