When you take out homeowners insurance, your insurance company will keep a record of the size and age of your house and the fixtures in it. This enables your insurance company to calculate how much it will cost to replace your home if it is wholly damaged, such as in a fire. If you remodel your home or make significant upgrades, take active steps to communicate the changes to your insurance provider or you might find yourself underinsured. You might find that your home improvement actually reduces your insurance policy premium, so it is worth picking up the telephone.
Gather your insurance policy documents. Locate the contact details for your insurance provider or broker and telephone him. Have your policy number at hand.
Explain that you have completed home improvements. Be prepared to describe the improvements in detail and to confirm their estimated cost or value.
Ask whether you need extra insurance coverage for your home improvements. If you have expanded your home, you might need further coverage. Typically, this will increase your policy premium. However, you may be able to claim a premium discount for improvements which make your home more secure. Don't just think about the obvious security updates, such as security doors or alarm systems. Upgraded electrical systems and plumbing decrease the risk of fire and flood,and may reduce your premium, particularly if your old systems did not meet the latest safety standards.
Take photographs of your home improvements. Put together a package containing the photographs, copies of your contractors' receipts, any property appraisals, receipts for materials which you personally used in the home improvement process, copies of any safety inspections and copies of building permits taken out by you or your contractors. Send these to your insurance company if they ask you to do so. Insurance companies typically require proof that your work meets local building and safety codes before they will agree to insure it.
Request a copy of the revised policy. Check the changes carefully, making sure that they accurately reflect the work you have done and the revised premium you agreed with the insurance company. Pay an increase in premium.
- Your insurance policy might require you to notify your insurance company before you commence any home improvement work. Even if it doesn't, it is worth notifying your insurer anyway. Your insurance company might recommend that you insure the works and materials during the construction process, which will cover you should an insurance event happen to the work in progress. Before you do any work, check your policy, or telephone your insurer.
- You absolutely must have enough insurance to rebuild your home. Do make sure that the revised policy amount is adequate.
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