In addition to boosting the functionality and beauty of one’s home, a common reason for a homeowner to remodel is to boost the home’s overall value. While using durable, quality materials is sure to turn a return on your investment, an extra boost in your home’s value may have a direct affect on your rates for homeowner’s insurance in San Diego, CA.
More Value Means More Insurance
Your homeowner’s insurance is based on how much your home is worth, so if you increase the overall value of your home, the amount of homeowner’s insurance needed will increase respectively. For example, let’s say your home is worth $500,000. After a new kitchen renovation, the home is appraised at $540,000. If you have a policy that covers your home for $500,000, the minimum amount required at the time of purchase, you would be under-covered in the event that damage, such as that from a natural disaster, occurs.
Some Improvements are Riskier than Others
One of the elements of your homeowner’s insurance policy is personal liability coverage, coverage for bodily injury and property damage sustained by others, for which you or your family is legally responsible. If your home update involves building new features such as a deck, hot tub or pool, you are increasing the risk of injury to your family and visitors and your insurer could refuse to cover the updates. If your insurance company finds out such improvements were made after the fact, it has the right to drop you.
Some Improvements can Lower Insurance Costs
Fortunately, there are improvements that can help to lower insurance costs. For example, improvements that increase the overall safety of your home such as deadbolt locks, alarm systems, shatterproof windows and motion-sensor lighting can result in lower home insurance costs depending on your provider. Filling a pool and turning into a patio is another way to reduce costs, however in sunny San Diego, it’s probably more common to install a fence around the pool to increase safety and security, and hopefully reduce costs.
Make a Decision for Your Individual Needs
Ultimately, the best policy when doing home renovations is to let your insurance company know about them, preferably before you start the work so you can determine what you will and will not be covered for and if you will have to incur any additional monthly costs.
For more information about homeowner’s insurance, contact American Tri-Star insurance at 619-272-2100 and speak with one of our expert insurance agents. Along with tips for how to reduce your homeowner’s insurance rates, they can explain some of our packages which provide lower rates when bundling homeowner’s, health and car insurance in San Diego.