Are You Covered Now That You Remodeled Your Home?

You’ve invested time, energy and care into your home, and it shows. But if your insurance coverage is still in its starter phase, it may not reflect your home’s true value.

If you’ve done any upgrades to your home, from getting a new roof to installing marble countertops, it might be time to talk to your insurance agent. Your home’s value may have changed, and your policy could need an update.

What is replacement cost value and why is it important?

Replacement cost is the amount it would take to rebuild your home to its pre-loss condition in the event of a total loss, like a tornado or fire. The purpose isn’t to upgrade or improve your home after a loss, but restore it to exactly how it stood before.

For example, if your home is destroyed in a hurricane, replacement cost coverage helps ensure you can rebuild without the financial burden of covering the gap between your policy and today’s construction costs.

Let’s say you have replacement cost coverage on your fixer-upper home. Since you purchased it, you’ve remodeled the kitchen, added a three-season room and upgraded the siding. Life goes on, and you don’t think twice about your coverage until the unthinkable happens and a fire destroys your home. You assume your insurance will cover the rebuild, but here’s the catch: your policy limits still reflect the home’s original, pre-renovation condition. Since your policy wasn’t updated, there may be coverage gaps.

To avoid this type of situation, as you renovate or make upgrades, make sure that you review your policy each time with your agent to see if changes are needed to ensure your policy keeps pace with your home’s current value.

What home upgrades or changes require a policy update?

Let your agent know if you’ve made changes like:

• Replacing or upgrading your roof

• Building a new structure such as a pole barn or garage

• Putting on an addition that increases square footage

• Performing renovations or upgrades

• Adding new amenities like a finished basement or patio

Even if you haven’t made big changes, it’s smart to check in with your agent annually. As property values, construction costs and replacement values fluctuate, regular reviews help ensure you’ve got enough coverage to fully rebuild or repair your home if needed.

Use this checklist to keep track of your home renovations: Home Update & Insurance Review Checklist

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