There is exciting energy that comes with a home renovation. Whether you are finally breaking ground on that dream kitchen, finishing the basement to create a family den, or installing a backyard pool for the summer, it feels like a fresh start. You spend months picking out tiles, arguing over paint swatches, and vetting contractors. It’s a major investment in your property and your quality of life.
But amidst the excitement of blueprints and demolition days, there is one critical partner you might have forgotten to loop in: your insurance agent.
At Bull Insurance Agency, we know that your life is busy. As business owners and professionals, you likely spend your days managing risks and putting out fires at work. The last thing you want is to bring those headaches home. However, substantial changes to your home structure often mean substantial changes to your risk profile.
Renovating doesn’t just change how your home looks; it changes how it needs to be protected. If your policy doesn’t evolve along with your house, you could be left underinsured or, in some cases, completely exposed.
We believe in making insurance simple and efficient so you can focus on the fun parts of your remodel. Here is a straightforward guide to the five key risks you need to address before the first hammer swings.
1. The Value Gap: Increasing Your Coverage Limits
The primary goal of a renovation is usually to increase the value of your home or improve its livability. A brand-new chef’s kitchen with granite countertops and commercial-grade appliances costs significantly more to replace than the outdated laminate setup you had before.
Here is the risk: Your current home insurance policy is based on the replacement cost of your home before the renovation.
If you complete a $100,000 addition but fail to update your coverage limits, you are effectively underinsuring your biggest asset. If a fire were to damage your home shortly after the project is finished, your payout would likely only cover the old value, leaving you to pay the difference out of pocket.
The Fix:
Communication is key. Before the project starts, give us a quick call. We can estimate the potential increase in replacement cost and adjust your dwelling coverage accordingly. We want to ensure that every new dollar you invest in your home is protected from day one.
2. New Features, New Liabilities
Standard home insurance policies typically include personal liability coverage. This protects you if someone gets hurt on your property and decides to sue. However, certain renovations introduce new levels of risk that your standard policy might not be built to handle.
The classic example is a swimming pool. While great for cooling off, a pool is considered a major liability risk. If a guest slips on the wet deck or is injured while swimming, you could be held responsible for medical bills and legal fees. The same logic applies to other additions like trampolines, hot tubs, or even extensive landscaping that alters the terrain of your yard.
The Fix:
We can review your current liability limits. In many cases, adding a “high-risk” feature like a pool requires enhancing your liability coverage. It is a simple step that provides massive peace of mind, ensuring that a backyard accident doesn’t jeopardize your financial future.
3. The Construction Gap: Additional Policy Needs
Many homeowners assume that their standard policy covers the home while it is under construction. This is a dangerous assumption. Standard policies are designed for homes that are lived in and intact, not homes with gaping holes in the roof or stacks of lumber sitting in the driveway.
During a renovation, you face unique risks:
- Theft: Building materials and expensive tools left on-site are prime targets for thieves.
- Damage: Partially built structures are more vulnerable to wind, rain, and fire.
- Injury: A construction site is a hazardous environment for visitors.
You may need a specific type of coverage known as Builders Risk Insurance. This protects the structure, the materials, and the equipment while the work is in progress. Additionally, if you have multiple subcontractors working on the property, you might want to look into personal umbrella coverage to provide an extra layer of liability protection.
The Fix:
Let us take the frustration out of this process. We can quickly assess the scope of your project and tell you if your current policy holds up or if a temporary Builders Risk policy is necessary.
4. The Contractor Question: Trust but Verify
If you are hiring a general contractor, you are bringing a third party onto your property to perform dangerous work. While most professionals are upstanding, you cannot simply take their word for it when it comes to insurance.
If a contractor is injured on your property and doesn’t have workers’ compensation insurance, they could sue you. If they accidentally drill into a pipe and flood your home, and they don’t have general liability insurance, you could be stuck with the repair bill.
The Fix:
Always ask for copies of their proof of insurance documents. Specifically, look for:
- General Liability: To cover damages they cause to your home.
- Workers’ Compensation: To cover injuries to their crew.
- Bonding: To protect you if they fail to complete the job or pay their suppliers.
Don’t feel awkward asking for this. It is standard business practice. If a contractor hesitates to show you their papers, consider that a major red flag.
5. The Occupancy Rule: Are You Moving Out?
Major renovations often require the family to move out for a few weeks or even months. It makes sense—nobody wants to live in a construction zone without a working kitchen or bathroom.
However, moving out can trigger a specific clause in your insurance policy regarding “vacancy” or “unoccupancy.” Most homeowners insurance policies require the home to be occupied to remain valid. An empty house is statistically riskier; there is no one home to stop a small water leak from becoming a flood, and empty homes are targets for vandalism and burglary.
If you vacate your home for more than 30 or 60 days (depending on the carrier) without notifying your insurer, your coverage could be voided.
The Fix:
Simply keep us in the loop. If you plan to live elsewhere during the build, let us know. We can arrange for a vacancy permit or a specific policy endorsement that ensures you stay covered, even when you aren’t sleeping there.
We Do Insurance at the Speed of Your Life
Renovating is stressful enough without worrying about the fine print of your insurance policy. That is where we come in. At Bull Insurance Agency, our process fits into YOUR life, not the other way around.
Because we are 100% independent, we aren’t tied to one single insurance provider. We have the freedom to shop the open market to find the best combination of cost and coverage for your specific renovation needs.
Stay in Touch
The most critical takeaway is this: communicate with us. Failing to inform your insurance carrier about renovations can lead to being underinsured or, in worst-case scenarios, having your policy canceled or non-renewed.
You focus on picking out the perfect backsplash and managing the contractors. Let us handle the risk. Contact our team today to discuss your future home projects. We’ve got your back.