The Pandemic of 2020 made Americans more aware of home projects that needed to be done. During the time that many were confined to their homes, home improvements soared. In fact, three out of four interviewed homeowners admitted to completing a home project during the Covid-19 pandemic. If you have made changes, renovations, or additions to your home, should you report it to your local independent insurance agent? If you aren’t sure, read on to find out what home improvements should be communicated.
Updates to your home can certainly impact the value of your home. If you simply painted the walls and changed carpets, this does not need to be passed on to your agent; however, making significant updates, renovations or additions that would affect the cost to rebuild your property by $5000 or more, should be reported.
Imagine This Home Improvement Project…
Imagine that you did a total renovation to your kitchen that also involved adding square footage off the back of your home. Regardless of how small the addition is, you just increased your total square footage of your home, plus just increased the value of your home significantly by adding new custom cabinetry, solid surface countertops, and brand-new state of the art appliances. Now, here is where the problem may arise with your coverage limits.
When your agent wrote your Alabama homeowners insurance policy, he/she reviewed all the aspects of your home to determine the amount of coverage you would need to properly protect your home. Those things include, but aren’t limited to:
- Age, condition, and type of your roof
- Total square footage
- Number of bathrooms and their condition
- Type of basement (finished or unfinished)
The agent’s objective is to provide an estimation of the cost to rebuild your exact home should a covered peril occur and destroy your home and write that amount of coverage to reflect that. Failing to communicate this renovation and small addition to your agent could mean your home is underinsured, meaning if your home was destroyed, there may not be adequate coverage to rebuild your house to its exact state.
Your agent can work with you regarding any and all home improvement projects and make the necessary adjustments to ensure your coverage limits are adequate and specific to your homeowners’ needs.
When in Doubt, Contact Your Agent About Home Improvements
Losses can and do happen! If you should experience a total loss situation and failed to notify your agent about a large project, you could be faced with some serious financial issues. It is always recommended to be proactive when you have made substantial changes to your home. When in doubt, contact your agent.
The good news is that Burkett & Associates is here for you for all your Alabama homeowners insurance needs. If you have concerns about coverage and rising costs of building materials, should you ever need to rebuild, there is Guaranteed Replacement Cost coverage that can be purchased. With this type of coverage, you will have the peace of mind knowing that if you experience a covered loss and need to rebuild, this coverage will allow for a rebuild without the limitation of the listed coverage amount on the policy. This way, there is no stress about being underinsured.
If you have questions or concerns regarding any home improvement project, coverage concerns, or a quote on Guaranteed Replacement cost, call us today at 256-704-7400.