Check home insurance terms before renovating

By Staff | April 29, 2013 | Last updated on April 29, 2013
2 min read

Spring is prime house-hunting season. So many homeowners give their homes facelifts around this time of year.

The only problem is many people also fail to consider the insurance implications of these renovations, says new TD research. The bank says only 6% of homeowners check their policies to ensure they’re covered during the upgrades.

Read: Homeowners to spend 15k on renovations

What’s more, only 16% follow up with providers afterwards to check if their policies need an update based on the changes.

Tackling “more challenging projects like electrical work yourself [can] actually invalidate your insurance policies,” warns Dave Minor, a vice president at TD Insurance.

Read: 15 steps to protect your clients’ homes

To help your clients, Minor busts three common home insurance myths. These are:

Myth #1: My home will be covered during renovations.

More than half (56%) homeowners say they’ll be covered by their original home insurance policy while their home is being renovated. What’s more, most are unaware that moving out for more than 30 days requires a policy update.

“If you’re adding an extension to your home, [for example,] that may require you to change your entire policy to a building under construction,” says Minor. “If you’re not living in your home during renovations, it becomes an easier target for thieves and undetected water damage, which is why insurers may require you to secure a vacancy permit.”

Myth #2: My contractor’s insurance will cover any potential injuries.

Contractors are trained professionals, but accidents can happen. Despite this reality, 41% of homeowners believe they won’t be liable for any injuries.

“You could be liable for their medical bills, lost wages, or damages for pain and suffering,” says Minor. “When choosing a builder, ask to see their public liability insurance certificate.”

Myth #3: Renovations don’t affect my insurance coverage.

Some renovations can decrease premiums, so TD finds 79% of owners stated they’d make certain upgrades to their homes if they could save money on insurance over the long term.

“Installing security devices like alarm systems and deadbolts, or fixing your weathered roof can decrease your premiums,” says Minor.

Read: Turn cottages into nest eggs

On the other hand, up to 22% of owners are unaware that installing expensive appliances, for instance, can increase premiums.

Minor adds, “Water proofing your basement may not be exciting, but these types of renovations can help protect your home and belongings” and still up the value of your home.


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The staff of have been covering news for financial advisors since 1998.