Skip to content

Cowart Insurance Agency Blog

All You Ever Wanted to Know About Insurance

How Does Remodeling My House Affect My Insurance?

Envision your house transformed into a welcoming space with fresh updates and extra room for the things you enjoy. With a remodeling project you can open up walls, add lighting or upgrade the flooring to create a stylish look and improve the efficiency of your home.

Renovating your home can be exciting and overwhelming, and the last thing you may consider during the process is your homeowners insurance policy. If you didn’t think about this, you’re not alone! Communicating with us when modifications are made will help prevent your house from being underinsured and policy limits from not being enough to cover your house in the event of a loss.

 In order to ensure your home is properly insured, our agency utilizes a replacement cost estimator (RCE). The RCE is a tool used to assess the cost to rebuild your home with similar materials if it is damaged or destroyed.

 When adjustments are made that may impact the replacement value, it’s the homeowner’s responsibility to inform us so we can adjust the estimate. The replacement value of the home cannot be calculated correctly without us knowing about added features, and oftentimes that is last on the “to-do” list for you.

 Guaranteed home replacement cost is a common Auto-Owners coverage you may already carry or may be eligible for if your home is insured to 100% replacement cost. It’s designed to offer a cushion if there are unexpected additional costs to rebuild the home from the initial evaluation, such as increased cost of building materials. However, if the home is not insured to 100% replacement cost, this coverage will likely not apply, potentially causing a significant disadvantage upon claim time.

Keep in mind some updates can save you money on your homeowners insurance. For instance, replacing the roof, installing security features, sprinkler systems, water shut-off devices or a backup generator may lower your rates or even offer a discount on your premium.   

 If you anticipate making renovations to your home – whether it’s adding a new deck or remodeling your kitchen – ask us how this could impact your insurance policy to ensure you are protected financially during and after the project.