When you make improvements to your homes, whether it’s a new coat of paint or a major remodel, it’s easy to forget that these changes can directly impact our home insurance quote. Renovations can increase the value of that asset, which in turn can affect your insurance quotes. That’s why it’s essential to understand how home renovations can impact your insurance costs, both positively and negatively.
At Affordable Quotes Insurance, we believe in helping homeowners like us navigate these changes and ensure that the right coverage is in place to protect what matters most. So, let’s break down the connection between home renovations and home insurance in Calgary.
How Home Renovations Affect Insurance Costs
Home renovations can lead to various changes in how insurance companies view your property. These changes may result in higher or lower premiums, depending on the nature of the renovation. Let’s look at how certain renovations can impact your home insurance quote.
Increasing Insurance Costs
Some renovations may increase the overall value of your home, which can lead to higher insurance costs. This is often due to the increased replacement cost of your home, which is the amount of money needed to rebuild your home if it were destroyed. Here are a few examples of how home improvements might raise your insurance costs:
- Adding Value to Your Home: If you add more living space or upgrade to higher-end materials, your home’s value rises. Whether you build a new room or remodel the kitchen, these changes might increase your home’s market value, so your insurance provider will likely adjust your premium accordingly.
- Increased Replacement Costs: When you renovate, particularly with expensive materials, the cost to replace those materials in case of damage or loss increases. Installing premium countertops or hardwood floors might raise the cost of replacing your home in a disaster.
Decreasing Insurance Costs
On the other hand, some home improvements can actually lead to a reduction in your home insurance premiums. These upgrades can lower the risk associated with your home, making it less likely to sustain damage from specific threats. Here are a few examples:
- Lowering Risks: Certain renovations reduce the risk of damage or loss, making your home safer and cheaper to insure. For instance, replacing an old roof or plumbing can decrease the chances of leaks or structural damage, resulting in lower insurance rates.
- Improved Home Security: Upgrades such as installing a more secure home security system or fire alarms may also help reduce your insurance premium. Insurance companies may see these improvements as a way to lower the risk of theft or fire, resulting in fewer claims and lower costs.
Renovations That Can Increase Insurance Costs
Some renovations are more likely to increase your insurance costs. These generally involve projects that add significant value to your home or increase the overall risk to your property. Here are a few of the most common types of renovations that might raise your home insurance quote:
Major Structural Changes
Adding extra rooms, building a garage, or extending your home’s square footage are all changes that can significantly increase its value. Since your home’s replacement value has increased, this could increase insurance premiums.
Luxury Upgrades
Home renovations that involve luxury items or finishes—like installing high-end appliances, marble countertops, or custom cabinetry—can significantly raise the value of your home. Insurance providers will consider these upgrades when determining your premiums.
Enhanced Home Security Systems
Adding advanced home security features, such as a complete surveillance system or smart home technology, can raise your home’s value. While these upgrades can reduce certain risks (e.g., theft), the initial installation costs and the increase in value might lead to higher insurance rates.
Renovations That Can Lower Your Insurance Quote
Some renovations can help reduce your home insurance premiums, typically by improving your home’s safety, durability, and energy efficiency. Here are some renovations that could lead to lower premiums:
Energy-Efficient Upgrades
Installing energy-efficient windows, insulation, or new heating and cooling systems can help lower your home’s overall risk. These renovations often reduce your utility costs and might even make your home more resilient to extreme weather, which can lower your premiums.
Fire-Resistant Materials
If you make your home more fire-resistant by upgrading to fire-resistant roofing materials or installing firebreaks, the risk of fire damage decreases. Your insurer might see this as a positive and lower your rates.
Roof and Plumbing Improvements
Replacing an old roof or updating plumbing systems can reduce the risk of water damage or leaks. Insurers typically offer discounts for these updates because they lower the likelihood of costly claims.
Conclusion
As you’ve seen, home renovations can significantly impact your home insurance quote in Calgary. Doing so ensures that your home is protected with the right coverage.
If you’ve recently completed renovations or are planning to, speaking with your insurance provider about updating your policy is a great idea. Affordable Quotes Insurance is here to help you make sure your home’s coverage aligns with its true value.
Get in touch with us today to see the types of insurance coverages in Calgary or for a free consultation and ensure your home is fully covered after renovations.