Should you tell your home insurance company about your renovations?

This article has been updated from a previous version. 

I’m planning a major home renovation and I’ve got my list of what needs to get done: Creating a reno plan, interviewing contractors and their references and having a payment schedule.  

Those are just the first three tasks on my list.  

One item that wasn’t on my list until recently? ‘Tell my home insurance provider that I’m doing renovations’.  

But then my editor asked me to write this piece.  

To be honest, contacting my home insurance company never crossed my mind.  

When you do renovations, you’re actively changing your home from how it used to look when you bought your policy. And that means its value might be changing as well. Let’s look at what exactly you have to tell your home insurer — if anything. 

How renovations can affect your policy 

Renovations, if done right, can increase the value of your home. But first you’ll want your insurance policy to reflect that change. 

• Coverage for new renovations: If something unexpected happens  your nice new renos will be covered. This also includes any new square footage added due to extensions or additions.  
• Avoiding policy voidance: We’ve written elsewhere about what could void your home insurance. If you have to leave your home for more than 30 days and have to shut off your utilities for the renovations, your home insurance provider may assume you’ve left your home vacant and void your policy. Letting them know will prevent this from happening.  
• Liability considerations: Renovations involve a construction team working on your property. If workplace accidents happen, you may be liable for those injuries. Make sure you’re covered to avoid unexpected out-of-pocket expenses. 

Speaking of liability, another reason why you might want to call your home insurance provider is to get extra insurance during the renovation period. That’s because while your contractor should have insurance, it may only cover their equipment and materials.  

Always check to see if your insurance policy covers your materials and equipment (appliances, etc.) from damage or theft and if it doesn’t, consider getting the extra insurance. Builder’s risk insurance is tailored for this purpose. It will cover your property during the renovation period and covers theft and damage.  

Read next: The best home renovations that pay off at resale 

Informing your insurance company can help bring down your rate 

Now, here’s the good news about why you should reach out to your home insurance provider: discounts! Your renovation could pave the way to a discount on your home insurance policy. Here are some renovations that could net you a discount:  

• Electricity. Insurance companies tend to set a higher premium for knob-and-tube wiring – if they insure it at all. Generally, it's considered a fire hazard. If you decide to rewire your home from knob-and-tube, you eliminate a lot of that risk making you eligible for a cheaper rate, or more insurance companies to shop around (resulting in a better rate).  
• Security. Insurance companies offer discounts when you add security features to your home to prevent theft. This includes a home alarm, video monitoring and often, a third-party security company.  
• Sewer upgrades. Apart from not wanting sewage in your nice, newly renovated home, getting a sewer backup added while doing renovations could get you a discount. Make sure to ask your insurance provider.  
  Related: Three home insurance endorsements to consider based on where you live 
• A new roof. Insurance providers don’t like old roofs because there’s a greater chance of leaks, which can lead to water damage and, consequently, a higher chance of insurance claims. Getting a new roof could mean a lower premium.  

A renovation is an exciting and stressful time. One thing that will reduce your stress is knowing you’re covered in case anything happens.  

That way, you can spend your time scrolling through bathroom designs on Instagram and deciding between the $2 subway tile and the $9 subway tile.  

(Here’s a free tip from a designer friend of mine: there’s no difference between the two!) 

Learn more: So, you've inherited a home. Now what?