When planning home upgrades or renovations, it’s easy to get swept up in the excitement of choosing paint colours, fixtures and finishes.
If you’re not careful, it’s just as easy to overlook how those changes could affect your homeowner’s insurance.
Whether you’re simply refreshing interior details or making major structural changes, any renovation can influence the value – and insurability – of your home.
Before the first nail is hammered, it’s essential to understand how your updates may impact your coverage and when you need to notify your insurance provider to ensure you’re fully protected.
Damian Pitcher, P&C general manager at CG Insurance, provided advice on some of the most commonly asked questions.
What types of home upgrades can affect a home insurance policy?
“Any upgrade or renovation can affect your insurance policy, especially if it increases the replacement cost of the home.
“For example, replacing an older bathroom with similar finishes may not require an adjustment, but upgrading a kitchen with high-end appliances, hardwood floors and custom cabinetry can increase the cost to rebuild that space.
“Structural changes or additions almost always require a review, since they increase the total rebuild value of the home.”
When should you inform your insurance company?
“Homeowners are required to inform us of any material changes that impact the value or use of the property.
“Ideally, this happens before the work begins so we can provide proper guidance and make sure you’re adequately protected for any potential losses.”
What happens if a homeowner fails to inform CG about a renovation?
”If we’re not informed of upgrades, the coverage may not reflect the true replacement value of the home. This could result in a shortfall in the event of a claim, even for smaller losses. Keeping your policy up to date helps ensure you’re properly covered when it matters most.”
Are there specific types of improvements that could actually lower a homeowner’s premium?
“Certain improvements can lead to a more favorable premium. Features like hurricane-rated windows, storm shutters, and fire or water detection systems reduce overall risk and improve the insurability of the home. These upgrades can influence pricing in a positive way.”
How does CG evaluate the increase in replacement cost after renovations, and does the homeowner need to submit a new appraisal or valuation?
“We typically review the scope of work and estimated costs provided by the homeowner or contractor. That’s usually enough to adjust the coverage.
“A new valuation might be requested in more complex cases, but it’s not always necessary. The main goal is to ensure the sum insured reflects the true rebuild value once the project is complete.”
What kind of renovations can trigger increased liability risks during renovations?
“Projects involving structural changes, outside contractors or work near neighbouring properties can raise liability risks.
“There’s also exposure if someone is injured on site. It’s important that appropriate contractor’s insurance is in place for these types of risks. This coverage may be arranged by the contractor or, in some cases, by the homeowner depending on how the project is set up.”
What’s the one piece of advice you would give every Bermuda homeowner before starting a renovation project?
“It’s always best to talk to your insurer before starting the work. That way you’ll know you’re covered during the project and that your policy reflects the upgraded value of your home afterward. We can also help guide your discussions with contractors to make sure the right protections are in place from day one.”
For more information, visit https://bm.cgcoralisle.com/product/home-and-contents-insurance.
