6 Home Renovations That Affect Your Homeowners Insurance Policy

Are you planning to upgrade your home in Central New York? While you're envisioning that perfect kitchen or dreaming of a finished basement, there's a crucial factor you might be overlooking: how these renovations affect your homeowners insurance.

At the Horan insurance agency, we understand the excitement—and stress—that comes with home improvements. We've seen firsthand how homeowners can be caught off guard when they realize their newly upgraded home isn't adequately protected. It's a situation that can turn your dream renovation into a potential nightmare.

But don't worry. We're here to guide you through the insurance implications of your home renovations. As an independent agency serving Central New York, we work with multiple carriers to provide you with options tailored to your unique needs. 

This gives us a broader perspective and the expertise to ensure your home remains fully protected, no matter how much it changes.

In this article, we'll explore six home renovations that can significantly impact your insurance coverage. We'll also provide expert advice on how to navigate these changes, so you can enjoy your improved home with confidence and security.

Understanding the Insurance Implications of Home Improvements

When you upgrade your home, you're not just enhancing your living space—you're likely increasing its value. This means your current insurance coverage might fall short if disaster strikes. 

Let's dive into six common home renovations and their potential insurance implications:

1. Finishing Your Basement: From Concrete Shell to Cozy Living Space

Transforming your basement from a storage area into a functional living space adds significant value to your home. In Central New York, where basements are common, this is a popular renovation.

Consider this scenario: You've invested $50,000 in finishing your 1,000 square foot basement in your Syracuse home, adding a family room, a small office, and a half bathroom. At an average cost of $175 to $200 per square foot, you've substantially increased your home's value.

However, if your insurance policy still reflects your home's pre-renovation value, you could be significantly underinsured. In the event of a total loss, you might not have enough coverage to rebuild your newly improved home.

To protect your investment, inform your insurance carrier about your finished basement. They may need to adjust your dwelling coverage to reflect the increased value of your home.

Also read: 4 Ways to Know Your House is Underinsured and How to Fix It.

2. Adding an Extension: Growing Your Home and Your Insurance Needs

Whether you're adding a sunroom to enjoy those rare sunny days in Central New York or building a home office for remote work, any addition to your house increases its square footage and value.

Let's say you've added a 400 square foot four-season room to your home in Fayetteville. This addition not only provides extra living space but also increases your home's market value. However, it also means your current insurance coverage may no longer be sufficient.

When you add an extension, you need to update your insurance policy to cover:

1. The increased square footage of your home
2. Any new contents in the addition
3. Potential changes in liability exposure

Contact your insurance agent as soon as your addition is complete. They can help you adjust your coverage to ensure your entire home—old and new—is fully protected.

3. Installing a Swimming Pool: Balancing Fun and Liability

A pool can be a great addition to your Central New York home, providing relief during those hot summer months. However, it also introduces new risks and liability concerns that your insurance needs to address.

For example, if you install an in-ground pool at your home in Liverpool, you'll need to consider:

• Increased liability coverage: Pools are considered an “attractive nuisance,” potentially increasing your liability risk.
• Property coverage for the pool itself: Some carriers include pool coverage under your dwelling insurance, while others categorize it as an “other structure.” This distinction is crucial, as “other structures” coverage is typically limited to 10% of your dwelling coverage. If your house is insured for $300,000, you'd only have $30,000 for the pool under “other structures” coverage, which might not be sufficient.
• Additional safety measures: Your insurer may require you to install safety features like a fence or pool cover.

Before you dive into pool ownership, consult with your insurance agent. They can help you understand how a pool will affect your policy so that you have the right coverage in place.

Learn more about how pools are viewed as attractive nuisances in our article: Avoid Home Insurance Denial by Fixing These 7 Property Issues.

4. Upgrading Your Security System: Enhancing Safety and Savings

Installing a comprehensive security system not only provides composure but can also lead to insurance savings. However, not all security systems are created equal in the eyes of insurers.

Imagine you've installed a hardwired security system in your Cicero home. This isn't a DIY Wi-Fi-connected system like Nest or Blink. Instead, it's a professional, hardwired system that's monitored 24/7 and can alert authorities to 

1. fire, 
2. carbon monoxide, or 
3. break-ins.

Benefits of upgrading your security system include:

• Potential premium discounts: Many insurers offer discounts for monitored security systems.
• Improved home safety: Reducing the risk of theft or undetected fires.
• Faster emergency response: Monitored systems can alert authorities even when you're not home.

Be sure to inform your insurance agent about your new security system. They can help you take advantage of any available discounts and ensure your policy reflects your home's improved safety features.

5. Remodeling Your Kitchen: Cooking Up Changes in Your Coverage

A kitchen remodel is one of the most impactful home renovations, both in terms of your daily life and your home's value. In Central New York, where we spend a lot of time indoors due to weather, a well-designed kitchen can significantly enhance your quality of life.

Consider this renovation: You've transformed your outdated kitchen in your Manlius home, replacing builder-grade finishes with high-end materials and appliances. You've installed:

• Quartz countertops replacing old formica
• A large island with a prep sink
• Professional-grade appliances like Viking ranges
• A larger, more powerful exhaust hood
• Custom cabinetry
• High-end flooring

This renovation could easily cost $50,000 or more, substantially increasing your home's value. However, if your insurance policy hasn't been updated, you might not have enough coverage to rebuild this gourmet kitchen in case of a disaster.

After a major kitchen remodel, it's crucial to review your homeowners insurance. You may need to increase your dwelling coverage to reflect your home's new value and ensure you have adequate coverage for your high-end appliances and finishes.

6. Adding Central Air Conditioning: Comfort that Impacts Your Coverage

In Central New York, where summers can be surprisingly hot and humid, adding central air conditioning can greatly improve your home's comfort and value. However, this upgrade also needs to be reflected in your insurance coverage.

If you've upgraded from central heat to central air conditioning in your Baldwinsville home, you've likely:

• Increased your home's value
• Added new equipment that needs to be insured
• Potentially changed your home's risk profile (for better or worse)

While the addition of central air might not seem as significant as a kitchen remodel or home addition, it's still an important change to communicate to your insurer. It could affect your premium and the amount of coverage you need to fully protect your home.

Other Home Renovations to Consider

While the above renovations have the most significant impact on your insurance needs, don't overlook smaller upgrades. Here are a few more to keep in mind:

• Adding a Trex deck: This durable, low-maintenance decking material adds value to your home and should be reflected in your coverage.
• Building a covered porch: This can increase your home's living space and value.
• Creating an outdoor kitchen: High-end grills, built-in refrigerators, and stonework can significantly increase your home's value.
• Replacing wall-to-wall carpeting with wide plank wood flooring: This upgrade can substantially increase your home's value and should be reported to your insurer.

It's worth noting that not all home improvements require notifying your insurance company. For instance, replacing windows with similar models typically doesn't necessitate an insurance update. However, when in doubt, it's always best to consult with your insurance agent.

Protecting Your Investment: The Importance of Updating Your Policy

When you invest in home improvements, you're not just creating a more comfortable living space—you're increasing your home's value. But if you don't update your insurance policy, you risk being underinsured.

Being underinsured means if disaster strikes, you might not have enough coverage to fully rebuild or replace your newly improved home. That's why it's crucial to inform your insurance carrier about significant renovations as soon as they're completed.

At Horan, we're dedicated to helping you safeguard your Central New York home with extensive protection. We understand the unique challenges and opportunities of homeownership in our region, from harsh winters to summer storms in CNY.

Here's how we can help:

1. Review your renovations: We'll discuss your home improvements in detail to understand how they've changed your home's value and risk profile.
2. Adjust your coverage: We'll work with you to update your policy, so it accurately reflects your home's current value and features.
3. Explore discounts: Some renovations, like security system upgrades, might qualify you for premium discounts.
4. Provide ongoing support: As your home continues to evolve, we'll be here to help your coverage keep pace.

Don't let your home improvements leave you vulnerable. Your dream renovation shouldn't turn into a coverage nightmare. At Horan, we're here to be your trusted resource, providing the guidance and support you need to make informed decisions about your coverage.

Click the Get a Quote button below to secure adequate protection for your Central New York home, inside and out. Let's work together to safeguard your renovations and give you the composure and security you deserve.