How Renovation Projects May Affect Your Home Insurance

Home renovation can come in various forms and sizes, sometimes it might be changing the colour of your living room, other times it can be an extension to your home to make your dream kitchen a reality.

Amidst the excitement of selecting paint colours and new furniture, it’s crucial to acknowledge the impact that these improvements could have on your home insurance premium to ensure there are no coverage gaps.

Recent studies suggest homeowners are not updating policies when making renovations which causes an underinsurance problem and can result in crippling financial loss after an already costly renovation. It’s vital to speak to your insurance partner about your renovation plan, so the coverage and premiums can be updated accordingly.

In this blog, we explore the relationship between home remodeling and insurance premiums in Ireland and how to ensure your investment is protected.

1. First off, it’s important to note that not all renovations are equal, and the type of renovation is a key factor on determining the effect it has on your premium.
2. The nature of renovations is that in most cases they will improve the house, but certain renovations can enable rate reductions- meaning you could end up paying a reduced premium or your rate could be raised, and you pay a higher premium if it’s a bigger renovation project. For example- if your renovation is structural, i.e. building an extension on to your home, this increases the size of the house which may increase your coverage limits and your premium. However, if it’s interior work such as kitchen and bathroom remodels, it might improve the value of your home but not affect your premium.
3. Other renovations can increase the value of the house but can also reduce your rate. For example, improving your home’s energy rating. Most homeowner insurance companies will offer discounts for energy upgrades thus making the home more sustainable.
4. Some other type of renovations may lead to more risk exposure, for example a kitchen remodel could increase the risk of fire, which will affect your insurance policy going forward.
5. It’s vital to check that the contractors working on your home have the correct insurance, so in case an accident occurs during renovations work, then the homeowner could be found liable.
6. You could also be more susceptible to increased risk during the renovation work taking place. For example, if you were fixing your roof, it could lead to flooding during bad weather or theft as it’s easier for people to gain access.

From all the examples above, you can see that renovations have a major impact on your policy. No matter what your renovation entails, we would advise you to speak to your insurer about your plans so they can steer you in the right direction for correct coverage and also update your policy.

Arachas can help you provide more information on how all this will affect your insurance & also be able to offer you more choice from trusted insurers so you choose the right policy at the right price.

You can also check out our other home insurance blogs on what you need to consider when insuring your new home or call our team on 01 582 7108 & one of our customer agents will be more than happy to guide you through the process of taking out or updating your home insurance policy.