Starting a Reno? Call Your Insurance Agent First

Here’s something you may not have considered when contemplating a reno: Be sure to notify your insurance company before taking a sledgehammer to your kitchen. Big or small, a home renovation can affect your policy. Here’s why:

If it’s a large project, you may have to live elsewhere while the work is completed. Unoccupied homes can invalidate a home insurance policy, since they are likelier targets of thieves. If your home is vacant, your insurance company can issue you a vacancy permit to ensure your coverage is intact.

Renovations can also change the details of your policy, both during the project and afterwards.

According to InsuranceHotline.com, any extensive work – such as a roof replacement – could reclassify your home as a building under construction.

If you consider why you decided to tackle a reno in the first place, you’ll admit that a large part of the reason for undertaking it was to increase the value of your home. Chances are your completed project – if done well – will make your home more valuable. Not just to you, but to buyers down the road. The amount that you’re insured for (and your premiums) should change to reflect this increased value. In addition to informing your insurance company, you should also be prepared to provide receipts if requested.

Also consider liability issues. If the workers you hire are injured on your property, you could be liable. InsuranceHotline.com recommends checking with the Better Business Bureau to make sure your contractor has adequate insurance for employees. Also check your own liability coverage and consider increasing your coverage during the project.

It’s better to be safe than sorry. Before you begin any renovation, call your insurance agent. Discuss the scope of the work and the length of the project. He or she can make suggestions on how to ensure your coverage is adequate and remains intact.

Your Home Buyers Now Look Beyond Bling to Basic

If you want to recoup your renovation dollars when you sell, be sure to repair that leaky roof before springing for a fabulous new kitchen. While a new kitchen may sound seductive, simply upgrading it is likely all you’ll need to do to attract prospective buyers. Today’s buyers are purchasing the basics, and they want them in good shape.

According to Barbara Pronin in a recent RIS Media’s Housecall blog, there are eight home remodeling projects that will pay you back. Mind you, Pronin doesn’t claim you’ll recover your total investment, but she does suggest you’ll recoup 80 percent or better, quite simply because “they increase the value of the property.” Pronin lists the following as the key payback projects:
• New garage doors
• A wood deck
• Exterior siding
• Attic conversions
• Kitchen updates
• New energy-efficient windows
• Basement remodel
• Backup power generator.
Kathy McCleary agrees. In HGTV’s online Remodeling magazine, McCleary writes, “Basic maintenance, such as the roof and exterior painting, are frequently more important than an awesome kitchen.” She quotes Sal Alfano, Remodeling’s editorial director. “Buyers want to take the basic systems for granted…Maintenance can chew up a lot of cash quickly, and people are afraid of that.”

Hot urban markets may be the exception. Says McCleary, “In the hottest housing markets, springing for a kitchen or bath remodel is a surefire investment, often returning more than 100 percent of the cost.”