Will Your Home Insurance Rates Increase After You Remodel?
Posted on: 27 September 2016
Remodeling a home is a great way to improve the way it looks and functions, and it can also cause an increase in the value of the home. If you are currently remodeling your house and spending a lot of money doing this, you may wonder how this will affect the cost of your home insurance. Remodeling can affect the cost of a person's home insurance rates, and the effects can either cause the policy to increase or decrease. Here are several things to know about the effects of remodeling on home insurance.
Things That May Cause Increases In Your Policy Rates
In most cases, the main reason the cost of a home insurance policy will increase after remodeling is completed is due to the increase in the value of the home. For example, if a home was worth $150,000 before remodeling and $200,000 afterwards, it only makes sense that the policy would go up. The new policy would have to cover a higher value, and one big factor in home insurance costs is the value of the property.
If you are not sure how much your house is worth after you remodel, you could do one of two things:
- Estimate the value and update your home insurance policy to reflect this amount.
- Get an appraisal to find out exactly how much the house is now worth so you can update your policy to reflect its current value.
It is very important to notify your insurance company after you have completed any types of remodeling tasks on your home. This will make sure that you have a sufficient level of coverage for your home, but it will also ensure that you are taking advantage of all the possible discounts there are for your insurance coverage.
Things That May Cause Decreases In Your Policy Rates
There are also a variety of things you can do to a home that may cause the costs of home insurance to drop. The things you can do to decrease your home insurance are things that decrease the chances that you will file a claim on your home insurance policy. Here are some of the things that can help you save money on this necessary expense:
- New roof – Putting a new roof on your house could have positive impacts on your home insurance. By letting your home insurance company know about this, you might get a 10% to 20% discount on your policy. A new roof on a house can eliminate the risk of leaks occurring or shingles blowing off or getting damaged from a storm.
- New plumbing – Replacing the old plumbing in a house could also impact your rates. New plumbing will reduce the risks of leaks springing in your home that lead to water damage. Water damage is a common type of claim homeowners make on their insurance policies.
- Security system – If you decide to add any home security features to your remodeling project, make sure you talk to the insurance company about these. Home security helps reduce the risks of break ins and other issues, and any products like this will usually result in a discount on home insurance.
There are so many other features that may also result in discounts, such as adding fire-resistant siding to your home. The only way you will know if you have ample coverage on your home is by calling an insurance company, such as East Tennessee Mutual Insurance, to find out. You are free to contact multiple companies to get home insurance quotes, and this is one of the best ways to take advantage of the available discounts offered on home insurance policies.
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