Home Improvements 2025: Protecting Your Home Renovation Projects for the New Year

The new year often brings new plans, and for many homeowners, this includes home renovation projects. These upgrades can enhance your property’s value and functionality, from modernizing your kitchen to building an outdoor deck. However, many homeowners overlook the critical step of updating their home insurance to align with these changes. Without proper coverage, your investment in renovations could be at risk.
This guide will explain the importance of home insurance upgrades, what to consider when renovating, and how to make sure your home and projects are adequately protected.
Why Updating Your Home Insurance is Important
When you renovate your home, the value of your property often increases. However, insurance policies based on the pre-renovation value may not cover the cost of repairs or replacements for your upgraded property.
Renovations can also introduce new risks, such as fire hazards from electrical updates or liability concerns with swimming pools. Updating your insurance policy makes sure that:
- Your new investments are protected.
- You meet lender or mortgage requirements.
- You avoid out-of-pocket expenses in case of accidents or damage.
Common Renovation Projects That Require Insurance Updates
Not all renovations require updating your home insurance, but specific projects significantly impact your home’s value or risk profile. Here are some examples:
Kitchen Remodels
Upgrading appliances, countertops, and cabinetry can drastically increase your home’s value. Your updated policy should reflect the replacement costs of high-end finishes and energy-efficient systems.
Bathroom Renovations
Luxury fixtures, spa-like bathtubs, or expensive tiling can add significant value. Make sure these upgrades are documented and covered under your policy.
Adding a Swimming Pool
A swimming pool enhances your lifestyle but also introduces liability risks. Inform your insurer so they can adjust your liability coverage to protect you in case of accidents.
Building an Addition
Whether it’s a new bedroom, a sunroom, or a home office, any addition to your home’s footprint increases its value and needs to be reflected in your coverage.
Outdoor Upgrades
Decks, patios, and landscaping improvements can add aesthetic and financial value to your home. Don’t forget to account for these in your insurance policy.
Steps to Protect Your Renovation Projects with Insurance
Step 1: Notify Your Insurance Provider
Before starting any renovation, contact your insurance company to discuss your plans. They can advise you on how the changes might impact your policy and what additional coverage you need.
Step 2: Update Your Dwelling Coverage
Dwelling coverage is the part of your policy that pays to rebuild or repair your home. Make sure this amount reflects the value of your renovations. For instance, the increased value should be accounted for if you install high-end kitchen appliances.
Step 3: Consider Builder’s Risk Insurance
During construction, your home may be exposed to additional risks like theft or weather damage. The builder’s risk insurance covers these scenarios, protecting you from unexpected losses during renovation.
Step 4: Review Your Liability Coverage
Renovation projects often involve contractors, workers, and heavy equipment. This increases the likelihood of injuries or accidents on your property. Make sure your liability coverage is sufficient to handle these risks.
Step 5: Document Your Renovations
Keep detailed records of all renovations, including receipts, contracts, and photos. This documentation will be invaluable if you need to file a claim.
Frequently Overlooked Insurance Considerations for Renovations
Temporary Living Expenses
Major renovations may require you to move out temporarily. Check if your policy includes Additional Living Expenses (ALE) coverage to cover hotel stays or rental costs during this period.
Increased Replacement Costs
Building materials and labor costs fluctuate, often increasing over time. To account for inflation, ensure your policy includes coverage for increased replacement costs.
Home-Based Business Upgrades
If your renovation includes creating a home office or workspace, you may need to adjust your policy to cover business equipment or liability for clients visiting your home.
The Important Questions to Ask Your Insurer
- Does my current policy cover the planned renovations?
- What additional coverage options should I consider for my project?
- How will my premiums change after the renovations are complete?
- Is builder’s risk insurance necessary for my project?
- Will my policy cover accidents involving contractors or workers?
How Renovations Can Impact Your Premiums
While upgrading your insurance policy may provide better protection, it may also lead to changes in your premiums. Here’s how:
- Premium Increases: High-value renovations, such as adding a swimming pool or luxury finishes, can increase your premiums due to higher replacement costs and liability risks.
- Premium Decreases: Energy-efficient upgrades, such as solar panels or modern HVAC systems, may qualify you for discounts as they reduce long-term risks.
Discuss these factors with your insurer to understand how your premiums will be affected and whether you qualify for discounts.
Choosing the Right Insurance Policy for Renovations
With so many variables, selecting the right policy can be daunting. Here are some tips to guide your decision:
- Compare Coverage Options
Not all policies are created equal. Shop around and compare policies from different providers to ensure you get the best coverage for your needs.
- Understand Exclusions
Some policies may exclude coverage for specific types of renovations or materials. Clarify these exclusions to avoid surprises.
- Bundle Your Policies
If you have multiple insurance needs, such as auto or life insurance, bundling them with the same provider can often lead to discounts.
Renovation Risks and Mitigation Tips
- Fire Hazards: Hire licensed electricians to minimize risks during electrical upgrades.
- Structural Damage: Work with certified contractors who adhere to local building codes.
- Water Damage: Ensure there’s proper sealing and waterproofing during bathroom or kitchen renovations.
- Theft: Secure construction sites with locks, cameras, and alarms to prevent equipment theft.
Post-Renovation Insurance Checklist
After completing your renovations, it’s important to revisit your insurance policy to double-check if everything is updated. Here’s a quick checklist:
- Notify your insurance provider of completed renovations.
- Update your dwelling and liability coverage to reflect new values.
- Review your policy for any additional discounts.
- Reassess your home’s replacement cost to make sure it’s adequately covered.
Shapiro Insurance Group is Here to Help with Home Renovations
Home renovations are exciting projects that can transform your living space and increase your property’s value. However, they also come with risks that require careful planning and proper insurance coverage. You protect your investment and enjoyment when you update your home insurance policy to align with your renovations.
At Shapiro Insurance Group, we’re here to guide you through the process and help you find the best coverage for your needs. Whether you’re planning a minor remodel or a major renovation, contact us today to ensure your home is fully protected for the new year and beyond.