Should I Adjust Insurance After Home Improvements? Three Questions Will Tell

Did you make home improvements to your house or condo this year? Many people did. After the project’s done, many clients ask “should I increase my home or condo insurance after a renovation”?

You depend on your homeowners insurance to pay to rebuild your home after a disaster. It’s important for insurance to keep up with inflation and changes in your home.

How can you tell if your project requires an insurance adjustment? Three questions should give you the answer. This assumes you had enough insurance before your project.

Did You Build Something?

Did you add living space to your home? Finish a basement or attic? Add a deck? If so, you should increase your Coverage A (Dwelling) insurance. How much? Probably by the full cost of the renovation.

Did you add a structure to the yard? A shed, fence, gazebo or swimming pool? Check your policy’s Coverage B (Other Structures) limit. Most homeowners policies cover Other Structures at 10% of Coverage A. If your home’s insured for $300,000, you likely have $30,000 Coverage B. Is that enough? Then you don’t need to adjust your insurance.

Update, or Upgrade?

Some home projects don’t affect property rebuilding cost. Most homeowners and condo insurance policies cover building items at replacement cost. That means “new for old”, without depreciation. If a fire damages your 20-year old roof or boiler, your insurance pays for a new one.

Did you replace your worn-out roof, flooring, kitchen or boiler?  If the replacement is the same quality as the old, you may not need to adjust your insurance.

Did you upgrade laminate counters with stone? Linoleum with ceramic tile? Standard cabinets with custom?  You should upgrade your Coverage A. How much?

Here’s a guide for what to include:

  • Demo and removal costs – not included
  • Design services – included
  • Materials – included, but only the upgrade differential.

Are Your Improvements Even Insured?

Home and Condo insurance doesn’t cover everything. Most landscaping and earthwork isn’t covered. Trees are covered only for a fraction of their replacement cost, and against limited perils.

Did you install solar panels or other green energy items? Off-the-shelf policies don’t cover breakdown or most power surge. Optional coverage may be available. You may want to update your insurance.

Questions About Your Home Insurance?

Do you live in Southern Maine? Considering an insurance change? Not sure if you have enough home insurance to rebuild? Contact a Noyes Hall & Allen Insurance agent in South Portland at 207-799-5541.

We can help determine the replacement cost of your home. We offer a choice of many of Maine’s top insurers. We can check the market to find you the best value, and recommend coverage based on your needs. We’re independent and committed to you.