When buying a Greensboro homeowners insurance policy, you’ll no doubt have some questions about exactly what’s covered and what’s not. One question often asked is whether the policy covers home improvements. If the improvements are done to an area that’s been damaged or destroyed by a covered loss, then your policy will likely pay for all or part of the reconstruction or improvement, depending on the specifics of your coverage.
In cases other than repair or replacement of an area damaged during a covered loss, your Greensboro homeowners insurance won’t pay for the cost of an improvement but will likely pay for any future covered loss to that improved area, though additional coverage may be needed, depending on the extent of the improvements.
What Your Insurer is Looking At
The insurance business revolves around a transfer of risk for a fee. With homeowners coverage, your insurer is underwriting numerous potential losses that may occur with your home in exchange for regular premium payments added to their bottom line. The more risk your home represents to your underwriter, the higher the cost of your insurance protection should be. When making improvements to your home, you should understand that some renovations will cause your premium rates to increase because your home will become more valuable and, therefore, more expensive to fix if it becomes damaged or destroyed.
On the other hand, certain improvements can actually cause your premium cost to go down. An example of this is the adding a new roof that is fire resistant, thereby lowering your home’s risk, especially in areas of high wildfire risk. Certain roofs can also better withstand hail storms, which lowers the risk of a home in a hail-prone area.
What Coverage Do You Need?
When you buy homeowners insurance, your insurer will consider the size and value of your home, its condition and the cost for rebuilding it should disaster strike. When any of these factors change as a result of home improvements, the insurance coverage for your home may also need to be updated and you should contact your agent to go over your policy specifics.
Here are some tips to consider:
- Speak with your agent about your plans for renovation before starting the project to learn if you’ll need to change your policy limits
- Verify your contractor has adequate workers comp and liability coverage
- Consider increasing your liability protection prior to construction