How Getting Renovations Can Impact Your Home Insurance

Home renovations can freshen up an otherwise drab dwelling and increase the value of your house. Unfortunately, you might also run into unexpected expenses such as needing more insurance to cover a higher replacement value and added protections while people work on the space.

Some improvements naturally increase expenses, such as adding a pool or other luxury items. If your home still falls under prime mortgage insurance (PMI), an increase in property taxes that are umbrellaed into payments may result in higher overall costs as well.

Experts predict homeowners will spend around $621 billion in total home improvements in 2025. They may not realize the added costs of insurance, though. Going in with your eyes open prepares you for added expenses and allows you to plan. Here are the things you should consider before undertaking a new project.

1. New and Upgraded Materials

Whether you want to upgrade your countertops from Formica to granite or you’re getting a building up to code, replacing dated materials with higher end ones can up the replacement costs and thus the amount of insurance coverage you need.

Review your policy with your insurance agent to ensure you have adequate coverage should the worst happen. Those living in Florida and leasing may be subject to Senate Bill 4-D and need to add hurricane impact windows and doors. Associations must now keep records of structural conditions and maintenance work to share with unit owners and buyers.

However, insurance companies are also offering a discount on premiums of as much as 45% with proper maintenance and materials. Each location can be unique so seeking someone with knowledge of the area makes the most sense. Getting an independent adjuster should you have a claim can also increase the amount received in case of a claim.

2. Higher Home Value

If you build an addition and increase your home’s square footage, you’ll need added coverage should anything happen. The old insurance plan likely isn’t for enough funds to replace your new structure should you lose everything in a fire or natural disaster.

Also consider any additional personal items added space brings. One example is building an in-law suite to accommodate your aging parents. You’ll need added coverage to accommodate their belongings as well as enough to replace the building should it be irreparably damaged.

Take inventory and photos of everything, including the renovated areas and keep them on file in another location in case of emergency.

3. Safety Features and Bonus Items

Adding some safety features can reduce your insurance premiums. For example, if you live in a high crime area, adding bars to the windows or an in-home security system might net you a discount.

Working smoke alarms can bring an additional discount. Some insurance companies offer discounts for adding a new roof or sprinklers or upgrading wiring and plumbing.

Interior sprinkler systems can reduce damage caused by a fire and may bring perks such as lower premiums. Talk to your agent about other discounts, such as multiple policy perks when you have your automobiles and homeowners with the same company.

4. Construction Coverage

Good idea to add additional coverage for the liability of having workers with heavy equipment or climbing on ladders and such. Even the added number of deliveries could result in an injury and claim against your property.

DIYers may want to take out some builders’ risk insurance should something happen while a new room or section of your home is under construction. Potential damage could come from vandals, natural disasters or thieves.

Talk to your contractor about the coverage they have on their crew and equipment. Some states require they take out certain policies before working a job site.

5. Home Office Coverage

If you’re building a home office, you might find you need additional coverage. Depending upon the type of business you’re running, you may have to cover expensive equipment or take out added insurance to cover clients coming and going from your space.

Talk to your insurance provider about whether you can tag on an umbrella policy with extended coverage or if you need a separate business policy. Some companies offer in-home business insurance, which may be less than other policies.

6. Flood Insurance

If you don’t currently have flood insurance, you may not realize how pricey it can be. However, if you add a basement or otherwise change the landscape or structure of your home, you could create a scenario where you now need flood insurance.

The Insurance Information Institute reports that flood damage is excluded under standard policies. Homeowners can secure a separate policy through the National Flood Insurance Program via FEMA or private companies. Only 78% of people at risk of a flood secured some form of insurance in 2023. Flood insurance can add considerably to the overall cost of coverage.

Talk to your insurance agent before beginning basement construction to find out the requirements for your area. Where is the water table and can you build on with a basement or will you now be required to add expensive coverage to your policy you didn’t need before?

7. Check Contractor’s Insurance

Don’t just talk to your contractor about their insurance. Get written confirmation they are bonded and insured. The last thing you want is for someone on their crew to get harmed and you be responsible for all their medical expenses.

Another nightmare scenario involves a contractor who doesn’t know what they’re doing, damages your existing house and leaves the structure half-finished. Insurance is meant to protect homeowners from unscrupulous builders.

8. Transportation Concerns

If you’re transporting any of the building materials yourself, ensure your automobile insurance will cover any problems. Things such as bundles of wood or heavy tiles may come loose and create damage while driving down the road.

Typically, your auto insurance would cover you for any liability but it’s always best to double-check and make sure you have adequate amounts should the unthinkable happen.

9. Lapse in Coverage

You should always inform your insurance company of any upcoming renovations. Many policies have fine print that states you must tell them within so many days before starting construction to be covered. While the policy typically will cover damages during construction, such as a building collapsing, it’s best to cover your bases and make sure your agent is aware of your building plans and that you take out any additional recommended extensions to your policy.

Keep in mind if you must vacate your home during some of the renovations, your standard policy also won’t cover you for theft and vandalism as the property will be considered vacant. Talk to your agent about any needed coverage to protect your assets from bad players while you aren’t there.

Review Policy and Upgrade After Finishing Renovations

You should work with your provider and review your policies at several points during the renovation process. Talk to your agent before starting remodeling, during and after completion to ensure you have the insurance you need at a rate you can afford.

Once you’ve finished your upgrades, get an independent evaluation of replacement costs and ensure you have adequate coverage for your home’s current, updated value rather than what it was worth before the renovations began.

9 Steps to Take in Order to Make Your Home More Energy Efficient

Energy efficiency is on everyone’s minds as climate change and electricity bills increase. Fortunately, improving your energy consumption at home takes little effort and always results in impressive cost savings.

If you want to save money and reduce your environmental footprint, these nine energy-saving steps can help you achieve optimal efficiency with less power.

1.  Conduct an Energy Audit

You have two options for a residential energy audit: Hire a professional or do it yourself. The benefit of conducting an energy audit yourself is you can learn more about your home’s energy inefficiencies using everyday tools free of charge.

Conversely, a professional energy auditor will provide a more comprehensive and accurate assessment of your current energy consumption with actionable recommendations. Although professional home energy audits are costly at about $100-$2,000, the experts have a much better grasp of hidden inefficiencies you might be unaware of.

2.  Switch to LED Light Bulbs

Considering 15% of your home’s electricity consumption comes from lighting, swapping out incandescent light bulbs for light-emitting diodes (LEDs) can save you a lot of money.

LEDs expend 90% less energy, with $225 in annual savings on electricity bills. Energy isn’t the only place you save with LEDs, though — because they last 25 times longer than conventional bulbs, you’ll buy far fewer replacements.

Incandescent light bulbs last about 1,200 hours over their lifetime, meaning they usually need replacing every 1.64 years if you use them for two hours daily. LEDs work for 25,000 hours, requiring a replacement every 34.25 years. Do the math: You could spend $1,000 on incandescent bulbs over an LED’s life span.

3.  Reinsulate

If your home hasn’t been reinsulated for some time, you could miss out on energy efficiency and cost savings. Insulation is a barrier to heat flow, locking it in, lowering your heating and cooling expenses, and improving indoor comfort.

It is best to insulate everything in your home, from the walls to the ceilings and the floors. Even the garage door can be insulated. Proper insulation is measured by R-value — the material’s thermal resistance. Save 10% on heating and cooling costs annually with the right amount of R-value insulation.

4.  Seal Air Leaks

While insulating your home, identify air leaks from windows, doors, crawl spaces, attics, basements, vents, outlets and baseboards. Often, you can find an air leak by sensing a cool draft.

A technician can do a blow test to determine where air leaks are occurring and the severity. If you choose not to hire someone, conduct a less-detailed blow test yourself.

Turn off combustion appliances when the weather turns cold and windy. Ensure all the windows, doors, and fireplace flues are closed. Then, turn on all the exhaust fans in your home and light an incense stick near potentially drafty areas. If the smoke gets sucked out or blown away, there is an opening in need of weatherstripping.

5.  Install a Smart Thermostat

A smart thermostat is a Wi-Fi operating system capable of controlling heating and cooling for optimal indoor comfort. The benefits of using smart thermostats are as follows:

• Allows you to manage your home’s temperature remotely using your smartphone
• Learns your preferred temperature and schedule to adjust your settings automatically
• Uses geofencing to detect when you are on your way home, so it automatically adjusts
• Enable low-power standby mode when there is little activity
• Tracks energy use and monitors indoor humidity
• Uses sensors to detect room occupancy and adjusts the temperature accordingly

Save 8% on heating and cooling bills with an ENERGY STAR-certified smart thermostat, amounting to $50 annually.

6.  Replace Appliances With Efficient Models

Unquestionably, you couldn’t live without your microwave or refrigerator. When older appliances start breaking down, replacing them becomes your top priority.

Nowadays, efficient models of everyday home electronics — stove tops, ovens, washing machines, dishwashers and more — must meet the most current federal energy standards. While initial investments tend to be expensive, newer models reduce your carbon footprint and help you save money long-term.

You can always count on the U.S. Department of Energy’s ENERGY STAR appliances to do the job correctly with less power consumption. Just be sure to dispose of the older ones correctly — many stores will recycle old appliances for you when they drop off your new models.

7.  Invest in Water-Saving Fixtures

In addition to upgrading appliances, you can improve your home’s energy efficiency by installing water-saving fixtures, including faucets, showerheads and toilets.

Toilets account for 30% of residential water usage, with many conventional models using six gallons of water per flush. However, new WaterSense-labeled models only use 1.28 gallons per flush — still 20%-60% less than federal regulations.

Investing in water-conserving toilets saves up to 13,000 gallons annually, amounting to $140 in yearly water bills and $2,900 throughout the product’s life span.

8.  Use Smart Plugs

You may not realize it, but your television and other electronic devices consume a ton of energy just by being plugged in. Phantom devices can add $100-$200 to your annual electricity bills — a 10% increase in total energy use.

Like other smart devices, smart plugs are Wi-Fi-enabled and controlled through a smartphone or tablet app. You can also integrate your smart plug with a voice assistant like Google Home or Amazon Echo.

Smartphone control especially comes in handy when you’ve left devices plugged in by accident while traveling. One button can turn off home electronics remotely and save you money.

9.  Install Solar Panels

Solar panels have become more popular in recent years, especially with 2022’s Inflation Reduction Act extending tax credits on residential renewable energy projects.

Although solar panel systems are an expensive investment — even with incentives and rebates — homeowners usually save $42,000 over their 25-30-year lifetime, depending on your state’s electricity rates.

Of course, while solar panels still absorb energy in a rainy, cold or cloudy region, they work best where there is the most sun throughout the year.

Live Comfortably in an Energy-Efficient Home

An energy-efficient home enhances your comfort and helps ease the financial burden of rising utility costs. Even minor changes make a significant difference. Take a step-by-step approach to improving at-home energy use and reap immediate rewards.