Advertising Disclaimer

Does Homeowners Insurance Cover Home Renovation Projects?

Read Time: 5 mins

Our team is devoted to helping homeowners make the right coverage choices. We adhere to strict editorial guidelines to maintain the accuracy and relevance of our content. This article may feature our affiliate partners who provide us with compensation; however, our reviews remain independently formed. For further details, please refer to our editorial policy.

Does Homeowners Insurance Cover Home Renovation Projects?

Choosing to remodel your home or make updates can be a great way to up the value of your place and create an environment you enjoy living in. Whether you’re thinking about remodeling your kitchen or overhauling the bathroom, it is important to consider whether or not your home is adequately protected with insurance should something go awry.

Before you start construction on a remodeling project, be it DIY or with a professional contractor, you’re going to want to notify your insurance agent right away. If not, you could go without coverage in the event of a remodeling fail. While insurance will not fund your dream home simply because you’d like to change a few things, it can cover some types of damage accrued during the remodeling process.

Compare home insurance quotes
Find cheap rates from the best providers in your area

How does homeowners insurance cover home renovation projects? Let’s take a look. 

Will Homeowners Insurance Cover Renovation Projects?

Let’s say that a remodeling project quickly went south and you’re left with costly damages. Are you responsible for repairs? Luckily, your homeowners insurance will come to the rescue when damage is caused by a renovation, but you’re going to have to be proactive. In order to receive coverage, you’re going to have to contact your agent before starting a project. Odds are, you’re going to need to up your coverage amounts. 

Any project that will add significant value to your home is a cause to contact your insurance company. This includes building an addition, remodeling a kitchen, or adding on a bathroom. These are all things that quickly up the value of a home. Ensure that that the dwelling coverage amount (what the insurance company will pay for damages), matches exactly how much it would cost for you to replace your home. Before starting, checking the limits on your policy. Guarantee that they reflect the increased value of your home. 

Who Pays If A Contractor Damages Your Home? 

In a scenario where you hire a contractor to remodel your home, whether or not your insurance company pays depends on your policy, the type of damage, and exactly how much damage was caused. Homeowners insurance may help pay for the repairs, but generally speaking, the contractor’s insurance would be responsible for footing the bill for any damages.

If your insurance company would pay a claim for renovation damages, they would likely go about seeking reimbursement from the contractor’s insurance company eventually. With that said, always make sure you hire contractors who boast adequate insurance coverage before hiring them. Ask to see a copy of the contractor’s policies, as it should include both a commercial and general liability insurance policy. Homeowners insurance can cover home renovation project damages caused by a contractor, but typically it will be up to the contractor themselves to pay up. 

Is Shoddy Work Covered?

Let’s say you hire a contractor to remodel your first-floor powder room. They use defective building materials and the workmanship is shoddy. The sinks don’t work, the tiles are coming up, and the toilet barely flushes. Who pays for this low quality work? Unfortunately, you will probably have to pay out of pocket. Most homeowners insurance companies will not cover shoddy contractor workmanship or bad building materials. Generally speaking, coverage will only kick in should the shoddy workmanship cause a fire. In that case, the damage from the fire would be covered but not the cost to repair the wiring that caused the fire. 

Will Insurance Cover Damages You Caused During A Renovation Project?

Do it yourself projects are more popular than ever. While most of us would like to think we’re akin to Bob Vila or one of the Property Brothers, the reality is that most of us are novice remodelers at best. What happens if you damage your own property during the process of a renovation project? Your homeowners insurance will cover your house during a remodel, however, that protection may not always automatically extend to damage caused by your own failings, especially if you didn’t contact your insurance company beforehand.

Prior to starting a project, farm it out, and expect to have liability coverage and dwelling coverage up to snuff. This is key, particularly if you plan on having friends or family lend a hand with the renovations. Additionally, homeowners insurance may cover damage, but you’ll need before/after photos, copies of contracts, and receipts for any materials you purchased for the project itself. All of this may add a few steps to your remodeling project, but it could save you money long term if something goes wrong. 

Always Purchase Additional Renovation Coverage

While not offered by ever homeowners insurance company, some do offer additional renovation coverages. Typically they fall under labels such as “dwelling under construction” coverage or simply “renovation insurance.” These coverage types would be tacked on to your existing policy and should cover damage to building materials, theft, or foundational issues. 

Get Cheap Home Insurance
Compare quotes from the top insurance companies in your area to find the cheapest plan
Notice an error or discrepancy?
Despite our rigorous fact-checking process, we recognize that errors can sometimes occur, as we are only human. If you discover any inaccuracies, oversights, or outdated information within this post, please bring it to our attention. Your input is highly appreciated and instrumental in maintaining the accuracy of our content. Contact us here.

Leave a Comment

Thank You for Visiting HOIC