Guide to home renovation insurance

For most home renovations, your home insurance will provide the coverage you need during the work. However, for some major remodels, especially those where you won’t be living in the home during the work.

Whether you’re finishing a basement, gutting the kitchen or putting an addition on your home, renovations come with additional risks. It’s important to understand how your home insurance covers you for those risks.

Before you start a renovation, take the time to review your home insurance and find out if you need additional coverage.

What is home renovation insurance?

Home renovation insurance, also called dwelling under renovation insurance, builder’s risk insurance or home improvement insurance, is homeowners insurance that covers your home during renovations and remodeling projects.

This provides coverage above your standard homeowners insurance policy. Each policy has its own coverage limits, depending on the worth of your home and the policy you choose.

What does renovation insurance cover?

Renovation insurance covers your home during and after home improvements take place. It provides financial protection for medical bills if you or someone else is hurt during home renovations or if there’s been damage to your home or surrounding areas. 

Insurance for homes under construction also covers building materials, which may be at a higher risk of theft.

There are additional coverage considerations if you will not be living in the home during renovations. If you have completely moved out, including your personal property, during work, the house will be considered vacant. Homeowners insurance coverage is limited for homes that are vacant for more than 30 or 60 days, depending on the policy. Let your insurer know if the home will be vacant.

How much does home renovation insurance cost?

The cost of home renovation insurance depends on your situation, including your current policy and the renovation or remodeling project. You might not always need to pay any extra, especially if your renovations are minimal.

Renovations are minor updates, while remodeling is usually a complete overhaul of an existing space or adding a new one.

For a minor renovation, you probably won’t need to make insurance changes, so there won’t be any cost. If you need a home renovation insurance policy, however, the rate will vary depending on the type of project and how long it will take.

Do I need home insurance for renovations?

Before you get started on any renovations or remodeling, reach out to your homeowners insurance company. Let them know you’re renovating so they can determine what your policy does — and doesn’t — cover.

You may not need any additional coverage, but don’t assume. The bigger the project, the more likely it is you need additional coverage.

Does homeowners insurance cover home improvements?

When you make improvements to your home, you need to inform your insurance company. Most renovations increase the value of the home, and as a result the amount of dwelling coverage you need will go up.

Your home insurance company will cover the renovations you have done as long as there’s enough dwelling coverage. Contact your insurer when the work is done to make sure your coverage reflects the increased value of your home.

Home remodeling tips

If you’re getting ready to start a renovation or remodeling project, make sure you’re fully prepared first.

It pays, both literally and figuratively, to do your research in advance and go into the project prepared.

Part of that preparation includes making sure you’ve got the right home insurance coverage to protect you and those around you if a project goes wrong. Here is what else you should do to prepare for a project: 

• Contact your home insurance company. You’ll want to reach out before you start a project to see what your policy covers and discuss your renovation plans. When you’re about to get started, you may want to add an umbrella policy to ensure you have enough coverage. When the project is complete, your policy should reflect the changes to your home. Keep your insurance company updated every step of the way.
• Check everyone’s insurance. If you’re doing a project yourself, your existing home insurance policy should cover you. But if you’re hiring outside help, check everyone’s insurance, including the general contractor and any subcontractors they hire.

While many homeowners’ policies can cover renovations to some extent, it’s crucial to recognize the limitations and potential gaps, especially for major projects. Home renovation insurance, also known as dwelling under renovation insurance, steps in to provide specific coverage for home improvement endeavors. 

The cost varies depending on your project’s scope and your existing policy. If you’re taking on a DIY project, your insurance should offer some protection, but be sure to check your coverage limits. When contractors are involved, it’s essential to assess both their insurance and your own, ensuring comprehensive coverage. In the end, being informed and adequately prepared, in both your project and your insurance, is the key to a successful and stress-free renovation or remodeling experience.

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