BUSINESSWIRE – Many homeowners have spruced up their homes during the pandemic. But major remodeling upgrades could result in homeowners needing to update their insurance, too. Otherwise, the home may be under-insured if a disaster ever strikes.
“Remodeling your home can lead to higher insurance rates, since a home remodel often increases the rebuild cost of a home,” a new report from QuoteWizard.com states. “Your dwelling coverage limit should match the rebuild cost of your home.”
In general, expect to pay about an extra $36 for every additional $10,000 of added rebuild cost after a remodel, QuoteWizard.com’s report notes. Broken down by project, insurance rates likely will increase by an average of $54 after a $15,000 upper-grade bathroom renovation. After a $50,000 kitchen upgrade, insurance rates could increase by $180. Further, a home addition of about $48,000 for, say, a 20-by-20 family room (or 400 square feet) could increase rates by $173. A deck upgrade of about $10,000 could increase insurance rates by an average of $36 a year, the report notes.
The quality of the updates could also have an impact on premiums. For example, an updated roof that uses low fire resistance or window update with weak window panes could also result in an increase in home insurance premiums, the report notes.
Homeowners may want to talk to insurers before they start a major remodeling job so they can brace themselves for any added premium costs. Insurance companies factor in several variables when setting premiums, such as your claims history, home’s value, the home’s age and material, safety features, climate, and local property crime rates, and more, QuoteWizard.com notes.
Property damage comprises more than 98% of all homeowner insurance claims. Of property claims, wind, hail, fire, and lightning are the most common reported damages, the report finds.