How Home Improvements Can Impact Your Coverage
Home renovations are exciting. A new kitchen, a finished basement, or even converting space into a short-term rental can add comfort and value to your home. But what many homeowners don’t realize is this:
Certain renovations can unintentionally impact — or even void — parts of your insurance coverage.
At Boufford Insurance, we regularly help clients avoid coverage gaps that happen simply because their policy wasn’t updated after improvements.
Why Renovations Affect Insurance
Your homeowners policy is based on very specific details about your home — square footage, materials, usage, and replacement cost. When you make changes, you change the risk profile.
If your policy isn’t updated, you could face:
- Being underinsured after a loss
- Denied claims due to undisclosed changes
- Liability exposure
- Inadequate dwelling limits
Here’s where problems often arise.
- Upgrades and Remodeling
That dream kitchen with custom cabinetry and high-end appliances? It likely increased your home’s replacement cost.
Insurance covers the cost to rebuild — not the market value. If you upgrade finishes or materials and don’t increase your dwelling limit, you may fall below required coverage thresholds (like the 80% rule) and trigger penalties during a claim.
- Additions and Finished Basements
Adding square footage — whether it’s a sunroom, extra bedroom, or finished basement — increases rebuilding costs.
Finished basements also introduce new risks:
- Water backup exposure
- Additional electrical systems
- Egress requirements
- Added personal property
Without notifying your agent, your policy may still reflect your home’s original structure — leaving you underinsured.
- Short-Term Rentals and Home Sharing
Thinking about renting a room or listing your home on platforms like Airbnb or VRBO?
This is one of the most common coverage pitfalls.
Most standard homeowners policies are designed for owner-occupied residences — not business activity. Short-term rentals can:
- Void portions of your policy
- Limit liability coverage
- Exclude property damage caused by renters
- Require a different policy form entirely
Even occasional rentals can trigger underwriting concerns.
- Home Offices and Side Businesses
Since 2020, more homeowners are operating businesses from home. But business equipment, client visits, and product storage often require additional endorsements.
A standard policy offers limited business property protection — and minimal liability for business-related claims.
- Contractor and Permit Issues
If renovations are completed without proper permits or by uninsured contractors, claim complications can arise. Insurance companies may scrutinize workmanship and code compliance after a loss.
Why Independent Agents Matter
This is where working with an independent insurance agency truly makes a difference.
Unlike agents tied to a single carrier, independent agents can:
- Re-shop your coverage if your risk profile changes
- Adjust dwelling limits based on updated replacement costs
- Add endorsements for water backup, rentals, or business use
- Recommend umbrella policies if liability exposure increases
At Boufford Insurance, we proactively review coverage whenever your lifestyle changes — not just at renewal time.
Renovation Should Add Value — Not Risk
Your home evolves. Your insurance should evolve with it.
Before starting your next project — whether it’s a finished basement, a new addition, or exploring rental income — have a quick conversation with your insurance advisor. A 10-minute review today could prevent a costly surprise tomorrow.
If you’ve recently renovated or are planning changes, reach out to Boufford Insurance. We’ll make sure your coverage reflects the home you actually live in — not the one you used to have.
