Often times, people renovate their homes for a sense of change, a way to spice things up, or simply to update outdated appliances, furniture, or styles. Maybe they are just sick of the way the house has been for years and want to do something different. In other cases, they’re appliances or furniture are too outdated and needs to be revamped. Other times, a family is looking to sell their house and they’re hoping to add some value to it when they go to sell. Sometimes it’s as simple as a fresh coat of paint or as involved as a roof replacement. Sometimes it’ll be an entire kitchen makeover or basement remodel. whatever the case may be, there are lots of reasons for wanting to renovate your home.
Other times, the renovations are a result of damage that has happened to the house. For instance, something like a fire can drastically affect a home and it’s livability. Wind, water damage, hail, weather-related water damage, and theft account for 76% of home insurance claims. Thankfully, for many who are in need when something tragic like that happens, they have home insurance that will help carry the burden, if not pay for entirely, the costs of fixing up the damaged area. There are some aspects to home renovation that won’t be part of typical home insurance coverage, and we’ll talk about that too. However, let’s start with what would be included in a typical home insurance coverage package.
An Overview of Home Insurance
The typical home insurance coverage will include protection for funds to repair or rebuild your home should it be damaged in a fire or other natural disasters like getting struck by lightning or a hurricane, for example. It does not, however, cover the cost of flooding. If your home were to flood, you would not be able to receive financial support from your home insurance company for water clean up in your home. Even though you may not be responsible for the flooding, they won’t be able to provide any financial support to help you deal with the aftermath in most basic home insurance packages.
Another thing to note about insurance policies is managing your deductibles. For example, most homeowner insurances will offer a deductible so to manage your premium. this means if your house were to catch on fire and you needed your home insurance to help cover the costs of rebuilding or replacing your home, if you had chosen a plan with a low deductible, you would then be responsible for however much that deductible is worth towards the repair of your home and the insurance would cover the rest up to what their policy coverage limit. Most insurances will offer a minimum deductible of around $500 to $1,000. This can help lower your premium should nothing happen to your home. Your premium is the total amount of money you pay per year for your home insurance coverage. So, a high deductible would leave you having to pay more upfront should something happen, but can save you money overall if nothing were to happen to your home and you didn’t need to use your insurance plan.
Most typical home insurance coverage plans will include coverage to your home, coverage to your belongings, liability protection, and additional living expenses. Coverage to your home includes, as mentioned, damage by a disaster. Coverage to your belongings will include your clothes, furniture, or any other personal belongings. This means your child’s stuffed animals and sports equipment would all be covered under a typical home insurance coverage package. Liability protection covers any injury or damage to someone else that you or your family are responsible for. For instance, if your kids were at the neighbors and broke a vase, for example, that would be covered. Finally, additional living expenses cover any expenses your family would take on should you be unable to live in your home as a result of fire damage or another disaster.
However, probably the most important part of understanding a typical home insurance coverage package when it comes to home improvements is either making sure the contractor you’re hiring for your emergency plumbing is insured, or if you’re planning on doing renovations yourself or with friends or family, is increasing the liability protection portion of your insurance policy.
If you were to hire a contractor and they were not insured and some form of injury happened to them during the renovation process, you could be left dealing with the cost of that lawsuit. If you and your friends and family have decided to take on the renovation project and something were to happen to them, the liability protection will only cover so much if you didn’t increase it in preparation. Not only that, but you can also add additional coverage to help with the cost of a renovation should it get damaged halfway through or before finished. Ultimately, when dealing with home renovations in general, you’re going to want to be in contact with your insurance agent beforehand to make sure everything goes smoothly.
Since your septic tank is considered part of your home, any pump service that needs to be done to it should be included in your typical home insurance coverage. However, should you neglect to maintain the septic tank and as a result, damage occurs, that would not be covered under your insurance. Other parts of the home like pools or even fencing could be included. However, there are limitations to what is covered. For example, the damage caused to your property has to be something that was sudden or irreversible, meaning the homeowner had no way of knowing or preparing to stop the damage from happening. This means damage by weather, theft or vandalism, or smoke damage would be covered. But failing to keep up with maintenance on your property and therefore damage occurs would not be included in your typical home insurance coverage.
Additionally, should your garage be broken into, vandalized, or damaged in the process, that would be covered by your typical home insurance coverage. As it is considered a part of your home, any damage caused to it by someone breaking in and stealing from you would be covered. If your garage was damaged by a fire and needed garage doors service, this too would be covered by your insurance. If you or your family cause the damage to your garage door, that also would be covered. Should someone else, for example, a friend of your teenage child who is learning to drive, run into your garage door, your home insurance wouldn’t cover this, but their auto insurance should. It’s reasons like this that make having insurance such an important thing to do. Some insurance policies will cover detached structures while others may not. Knowing the difference in your insurance package could make or break whether your garage is included, or your shed or maybe even gazebo.
What’s Not Included?
The most notable thing to mention about what isn’t included in typical home insurance coverage is flood damage or earthquake damage. However, these types of insurance policies can be purchased separately, but not as part of your standard or typical home insurance coverage. As something that would be a natural disaster and not due to the homeowner’s neglect that it happened, it may seem like this should be included in standard packages. However, it’s not. However, if you live in an area that’s known for flooding or where earth movements are frequent and have a mortgage with the bank, they’ll likely make you get flood insurance or insurance for earthquakes as a rider. A rider is basically an added protection that normally wouldn’t be included in your typical home insurance coverage, but would be in a special case like flooding.
Anything related to landscaping service would not fall into what is included in a typical home insurance coverage plan. However, should a tree fall and cause damage to your shed or home, the cost of the tree removal would be included then since it was unexpected damage to your property. If a tree were to just fall in your lawn and not injure or damage anything, you would be responsible for the financial burden of removing the tree from your yard. Similarly, any landscaping you do in your yard, flowers, shrubs, or trees, would not be covered by home insurance. Though these are a nice touch to home renovations and can even improve return value on a home, these renovations are not covered by your home insurance as they are not accidents or damage.
Not only would landscaping not be included with your typical home insurance coverage package, but neither would an appliance service be included should your dishwasher or refrigerator break. However, should either of those things break and cause damage to your floors from leaking, for example, the cost of repairing or replacing the flooring would be covered by your home insurance. This can fall under the category of maintenance issues not being covered by insurance. Anything that you as a homeowner should be taking responsibility for making sure it’s running properly or being maintained so it doesn’t break won’t be covered by homeowners’ insurance. Neglect or failure to maintain the property and therefore having rodent damage from termites or other various insects would not be covered. Mold or rust damage would not be covered.
Importance of Communicating With Your Insurance Agent
Any kind of addition you put on your property like adding a garage, build a deck or barn, install a swimming pool, you’re going to want to cover your insurance agent to make sure those items are added to your plan. Should you not communicate with your insurance agency and damage occurs to these improved areas, you would not qualify to receive financial support from your insurance for these improvements.
Should you be a collector of valuable items, communicating with your insurance agency about the value of these items could be important to make sure your belongings are properly accounted for. For example, if you had a collection of old cars or antique toys, you may want to itemize these belongings with your insurance agency so they know exactly how much they’re worth should something happen to them. Should you not specifically identify these valuable items and something were to happen, there’s often a flat rate price that will be offered to cover belongings and your collectible may be worth more than that. However, if you don’t specify that beforehand, you won’t be able to make a claim for more money to cover the loss of these valuables.
Homeowners insurance is a must for every place a person could live in, however, if you’re renting an apartment, house, or duplex, the homeowners’ insurance will not cover your personal belongings. The home insurance for a building being rented will cover the structure of the building and the owner’s investment in it, but it will not cover anything belonging to the renter. For this reason, if you’re renting from someone, it’s important that you invest in renter’s insurance. This way, your things are covered should they be stolen or damaged, especially by fire. The homeowners’ insurance will only cover the building should a fire happen, it will not cover the damage for anything inside the building. If you rent and don’t have renters insurance, all your belongings will be lost and there will be no reimbursement for it.
Insurance for your home can be a lot to understand, which is why it’s so important you communicate with your insurance agent to make sure you know what is covered and what isn’t. Especially if you’re looking to renovate your home, knowing which things could be covered with insurance will be helpful when you go to make those changes. A typical home insurance coverage package can help cover a lot of renovations should something go wrong, which can make the investment worthwhile. However, home insurance won’t cover home renovations that are a result of the house being old or worn down and needing some love. This is important to keep in mind when considering if your home could use renovations and which projects you can afford on your own.