Renovate or relocate — that is the question. If your current home is missing something you no longer want to live without, you probably want to weigh your options. Renovating a house gives you the flexibility to get the exact features you want, but it can come with unexpected challenges (like permitting delays) and additional costs (like higher homeowners insurance premiums). If you want to figure out if you should remodel or move, you have quite a bit to consider.
Some things you need to weigh on your own, like your family’s specific needs and the sentimental value of your current home. But as insurance experts, Bankrate can help you understand the home insurance ramifications of your decision to move or remodel.
Will remodeling affect my homeowners insurance?
Renovating a house does not always mean your home insurance costs will increase, although it might. In the “should I remodel or move?” debate, you should know that some renovations can actually help you save on home insurance premiums.
Generally, if you plan to make changes that will increase the value of your home or the level of liability on your property, you should inform your insurance provider. Failing to do so could leave you with insufficient coverage right at the moment you need it most. In fact, the Insurance Information Institute (Triple-I) recommends that you always notify your home insurance company before starting a renovation project.
To give you a clearer idea of the way your remodel could affect your home insurance — and to help you decide if you should renovate or sell — it can be helpful to look at specific renovations:
Adding square footage
When space is an issue, adding an extension can give you that home office you need or the finished basement for your teens to hang in, but it also means you need to update your homeowners insurance policy with your home’s updated characteristics and square footage. These changes might increase your premium since your dwelling coverage amount will likely increase.
That said, the update to your home insurance is well worth it. No one wants to be in a position in which they spend money on a renovation only to have the extension ruined by a disaster their policy could have covered.
If you have plans for a relatively simple kitchen upgrade — like replacing your backsplash or painting your cabinets — you probably can skip the call to your insurance company. But if you will be investing significant money in your kitchen renovation, such as upgrading your countertops from laminate to granite or upgrading your cabinetry to custom-made cabinets, ask if your policy needs to be updated. Because a kitchen …….