How Home Improvements Affect Your Insurance

Although they may be costly, home improvements can add to the value of your home. To make sure you protect your investment, consider this when remodeling or updating.


How Home Improvements Affect Your Insurance

For many homeowners, making improvements is a better choice than making a move. That may explain why home improvement expenditures in 2014 were on the upswing, totaling more than $300 billion according to the Home Improvement Research Institute.

Costs can add up quicky when the average bathroom remodeling project costs $16,128 and the average kitchen remodel costs $54,909.*

In most cases, remodeling projects increase the value of the home by 25% or more. That’s great news for homeowners when they sell. But if your insurance hasn’t kept pace with your improvements, it may be a sad tale if there’s a loss.

Annual Insurance Reviews

Ideally, you should review your homeowners insurance annually with your agent.

  • Make sure your property coverage limits are based on the value of the home, not the mortgage.
  • Discuss liability issues like those associated with a new swimming pool you’ve added.
  • Ask about savings if you’ve upgraded items like your roof, plumbing, electrical or heating.

Yes, it’s true that your premiums may increase with a home improvement project. But if there’s a loss, you’ll be happy you’ve kept your insurance coverage updated,

Before Renovation

There are other insurance considerations to discuss with your agent before or during a renovation:

  • If you hire a general contractor, make sure he is licensed and bonded.
  • If it’s a DIY project and friends are helping, make sure you have sufficient liability insurance in case of an accident or injury.
  • If you have to store furniture or other belongings offsite or in an onsite container, make sure it’s insured when not in your house.

Don’t Forget

What did you buy to furnish that new space? Did you add a home theater with a new TV? Or maybe your remodel included new furniture or other electronics.

Any additional personal property should be included in the limits of your homeowners policy.

Whatever you’re planning to do – or have done – to update your home, contact an agent at NCMIC Insurance Services to discuss the coverage you need to protect your investment.


The information in the NCMIC Learning Center is offered solely for general information and educational purposes. It is not offered as, nor does it represent, legal or professional advice. Neither does this information constitute a guideline, practice parameter or standard of care. You should not act or rely upon this information without seeking the advice of an attorney familiar with the specific legal requirements of the state(s) in which you practice. If there is a discrepancy between the site and an insurance policy you have with NCMIC, the policy will prevail.