When Should You Adjust Your Home Insurance Coverage?
Home insurance isn’t exactly the most exciting thing to think about—until you need it. Then, suddenly, it’s the most important thing in the world. But here’s the deal: if your coverage is outdated (or being dropped), you might be in for a nasty surprise when it’s time to file a claim.
So, when should you take a closer look at your policy? The short answer: whenever life throws big changes your way.
Let’s break it down.
Why Would You Need to Update Your Home Insurance?
Your home is always evolving, and so should your insurance coverage. Major renovations, such as expanding your kitchen or adding a second story, increase your home’s value—meaning you may need more coverage to reflect the new replacement costs.
Similarly, changes in local building costs can significantly affect how much it would take to rebuild your home. If the cost of materials and labor has skyrocketed, your current coverage might not be enough. Another factor to consider is the purchase of high-value items. That new art collection, top-of-the-line entertainment system, or family heirloom might exceed the limits of your current policy, leaving you underinsured if something happens.
On the flip side, if you’ve added safety features like security cameras, a monitored alarm system, or impact-resistant windows, you might qualify for a discount—so updating your policy could actually save you money. Reviewing your coverage on an annual basis ensures you’re protected no matter what changes occur in your home.
Top Home Renovations That Could Affect Your Coverage
Not all home projects are created equal—especially when it comes to insurance. Here are some that might require a policy adjustment:
Kitchen Remodel
A kitchen upgrade can drastically impact your home’s value. If you’ve added high-end appliances, custom cabinetry, or expensive countertops like quartz or marble, your replacement cost has likely increased. More luxurious finishes mean higher repair and replacement costs, so it’s essential to update your policy to reflect these changes. Otherwise, if a fire or flood damages your newly remodeled kitchen, you might not receive enough from your insurance to fully restore it.
Roof Replacement
A new roof is one of the most significant upgrades a homeowner can make, and it often affects insurance rates. Certain roofing materials, like metal or impact-resistant shingles, can lower premiums because they offer better protection against severe weather. However, if you’ve opted for high-end roofing materials such as slate or tile, your home’s overall value increases, and you may need additional coverage to reflect the higher replacement cost.
Adding a Pool
Pools are a great addition for family fun, but they also come with increased liability risks. Many insurers require higher liability coverage when a pool is added to a property due to the potential for accidents. Features like pool fencing, locked gates, and safety covers can help reduce risks and possibly lower the added insurance costs. Still, if you’re planning on installing a pool, it’s crucial to update your policy to ensure proper protection.
Finishing a Basement
Transforming a basement into a livable space adds square footage and increases your home’s value. Whether it becomes a guest suite, home theater, or personal gym, your insurer needs to know about the changes. Finished basements also introduce new risks, such as water damage or mold growth, so additional coverage for sump pumps and water backup protection may be necessary.
Home Renovations That Could LOWER Your Insurance Premiums
Good news—some upgrades might actually save you money! Here’s what could help:
Upgraded Electrical Systems
If your home still has outdated wiring, such as knob-and-tube or aluminum wiring, your insurance premiums might be higher due to fire risks. Upgrading to modern electrical systems with circuit breakers and grounded outlets can significantly reduce these risks and lower your premiums.
Impact or Fire-Resistant Roofing or Siding
To avoid being prone to storms and wildfires, impact or fire-resistant roofing materials such as Class 4 asphalt shingles or metal roofing can protect against hail, wind, fire, and debris. Many insurers offer discounts for these durable materials because they reduce the likelihood of expensive claims from storm or fire damage.
Additionally, updating your home’s siding from wood to stucco or other fire-resistant materials can save you money or help ensure your home does not get dropped by your current provider (if you are in a wildfire area).
Smart Security Systems
Installing a professionally monitored security system can reduce the risk of burglary, making your home safer and more attractive to insurance companies. Many insurers provide discounts for features like video surveillance, smart locks, and motion sensors.
Plumbing Upgrades
Old, corroded pipes can lead to leaks and costly water damage claims. Replacing outdated plumbing with modern materials like PEX or copper can prevent these issues and possibly lower your insurance premiums.
Home insurance isn’t a “set it and forget it” deal. As your home changes, so should your coverage. Whether you’re upgrading, expanding, or adding safety features, a quick check-in with The Sales Team Realtors and your insurance provider can ensure you’re properly protected—and maybe even save you some money.
Because the only surprise you want in homeownership is how great your place looks after a fresh renovation—not an unexpected insurance gap!