Does Homeowner’s Insurance Cover Renovations?

Does homeowner’s insurance cover renovations? Yes, homeowners insurance can cover renovations, but potential renovations could leave you with inadequate coverage throughout and after the project. However, the coverage of homeowners insurance you purchase is based on several factors. These include your residence’s size, condition, and the expense of reconstruction. Moreover, confirm that your contractor has enough liability insurance and worker compensation protection.

Choosing to enhance your liability coverage limits for a specific period of the renovation is the right choice in case of mishaps or injuries. Home insurance can provide coverage for injuries or theft incidents during your home renovation. It doesn’t cover the actual renovation work. Your insurance can cover expenses related to repairing. Or reconstructing your home after the destruction caused by specified perils, limited to the pre-damaged.

Does Homeowner's Insurance Cover Renovations?

Additionally, the renovation made to your house before the damage occurred may be included in your coverage if you adjust your policy accordingly. An instance is enhancing your dwelling coverage limit to accommodate superior building materials or additions. It’s important to consult with your homeowner’s insurance agent concerning your renovation plans to determine whether an increase in coverage is advisable.

Types of Renovations That Affect Homeowners Insurance

The forms of renovation you establish in your house affect the rate of your insurance requirements. Generally, any form that enhances your home’s value will specify the requirement for insurance protection and the associated higher premiums.

Home Addition

Including an addition is a potential renovation that enhances your home’s square footage and would improve the value of your home. For instance, constructing a family room at the back of your residence or including a dormer to enhance the second-floor space increases the value of your home.

Typically, the best time to contact your insurer concerning a home addition is during the planning phase. Once you have completed the architectural drawings, contact your insurance representative and inform them of your intentions.

Major Renovations and Improvements

Even though projects like improving your kitchen or bathroom don’t expand your home’s square footage, they can still affect your homeowner’s policy. Major interior renovations involve replacing old, outdated elements with new ones.

However, it might be right to secure replacement cost value instead of actual cash value if your current policy lacks this coverage. Although the former may be of higher cost as it provides additional financial protection for the upgraded, higher-grade elements in your home,.

Adding a pool, sauna, or hot tub

These components can offer the best deals, including extra home value, but also pose a liability risk. However, accidents or injuries are visible, enabling insurers to safeguard against liability claims by raising your premium when you install such elements.

Additionally, your insurer might ask you to install a fence or nighttime lighting around any water features on your property.

Replacing the Roof

Obtaining a new roof increases your home’s value and also affects your premium rate, with many insurers offering discounts for this improvement. In coastal areas close to hurricanes or wind storms, discounts may be available if you select damage-resistant materials for your roof.

This leads to a minimum rate on your insurance after installing a new roof. Furthermore, a similar event applies if you install new locks or tamper-proof windows.

Lastly, it’s advisable to consult with your insurance agent about potential discounts for these security measures.

Adding a Home Office

If you’re working from home and require a firm home office, this renovation could affect your insurance policy. For instance, operating a business from your residence where visitors come to your property increases the risk of liability claims.

However, your standard homeowner’s insurance might not cover business-related claims occurring on your premises. Moreover, if you store items for business use on your property, it might have restricted personal property coverage.

How Much Does Home Renovation Cost?

The influence of home insurance during renovations determines the increased dwelling value of your residence. However, insurers calculate replacement costs, by multiplying your home’s square footage by the local construction cost per foot.

Typically, this involves the expense of reconstructing your home with materials of similar quality in your neighborhood. Moreover, your home is valued at $200,000 on the market. However, insurers might recommend coverage of $275,000 if construction costs are high.

Lastly, if a seller’s market increases your home’s market value, your dwelling coverage might be minimal if the calculated rebuild is less than the market value.


Am I Required to Improve My Homeowners Insurance After a Renovation?

No, you are not allowed to improve your homeowner’s policy after renovation. But it is a wise decision to make to provide coverage for yourself financially.

Do I Need to Increase My Coverage When Building a Garage at My Home?

It depends. If your garage is connected to your house, it could be covered by your home insurance. But if you have a separate garage, the other structure’s coverage covers it, usually up to 10% of your home’s coverage.


It’s essential to recognize that your coverage limits may not be enough to protect during and after the project, regardless of the nature of your renovations. To ensure you have the necessary coverage, converse with your insurance agent before the construction starts.