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Renovations that Can Affect Home Insurance Rates

​Make Home Insurance Rates Part of the Renovation Plan
So, you’re thinking about a home renovation? It can be exciting to design a new floor plan, pick out flooring, and shop for those little extras to find the best bargains! It’s even more exciting to see it all come together after weeks, months, or even years of preparation and hard work. Most likely the last thing on your mind is home insurance, but it should be! 

Home insurance rates may shift due to renovations, either increasing or decreasing depending on what renovations are performed. So while you may be increasing the value of your home, you could also be leaving it vulnerable to losses. And while you may be incorporating upgrades that lower your home insurance rates, the savings will just be sitting there unless you contact your insurer to ask!

Typical Renovations That Change Your Home Insurance Rates
In the last decade, an average of over two million Canadians have started home renovation projects amounting to at least $1,000 according to the Canadian Mortgage and Housing Corporation (CMHC ). 

If you’ve recently renovated or are considering a change and wonder what types of renovations have an effect on home insurance rates, here are just a handful of examples:

  1. Turning an Extra Room into a Home Office – Once a home begins being utilized as a place of business, the insurance policy no longer covers accidents and damages associated with it. That means to be covered, you may need to invest in a policy extension. So while it doesn’t directly increase your home insurance rates, you will be paying more with extended coverage.
  2. New Roofing – The roof is arguably the single biggest factor that affects your home insurance rates. Investing in a new roof can reduce your rates for home insurance by as much as 10 to 15%!
  3. Kitchen Remodel – While a kitchen remodel is a popular choice among homeowners, it’s also the most costly, averaging between $20K-$60K. Along with increasing value, this will increase your total home replacement cost and therefore increase your home insurance rates. 
  4. Installing a Pool – The idea of a cool pool in your backyard may be a summer dream, but it can drastically increase home insurance rates due to a large increase in liability. A pool produces a higher risk of accidents, especially among children, so you should also consider that risk to your family.
  5. Converting the Garage – If you convert your garage to a workshop or livable space, it may increase home value and home insurance rates. Also remember that your car will no longer be stored in the garage, meaning that your car insurance rate could increase, too.

Home Insurance Rates During Construction
Depending on the duration of construction, your home insurance rates and policy classification may change. This can happen because homeowners decide on extra projects while walls are removed or other things are being improved. It may also occur out of necessity if problems are uncovered during the remodel. It’s not uncommon to find old plumbing, insulation, or outdated electrical in older homes.
Be sure to ask about your home insurance rates and classification before, during, and after the home remodel process. It’ll benefit you through potential savings and give you peace of mind that you are covered from any losses!

Looking for a new policy or want to know more about home insurance rates during renovation? Call Higgins Insurance at 1-866-273-2911.

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