Any renovation that adds square footage or materially upgrades existing systems or finishes increases the cost to rebuild your home. A finished basement, a kitchen remodel, a bathroom addition, or a new deck all add rebuild cost that your current policy may not reflect.
Why Your Policy Doesn't Update Itself
Insurance carriers don't automatically track home improvements. If you don't tell your agent, your dwelling coverage stays at whatever it was when you originally bought the policy - which may be significantly below what it would actually cost to rebuild the upgraded home.
The Coinsurance Problem
Being underinsured by a meaningful percentage doesn't just affect a total loss claim. Most homeowners policies include a coinsurance clause: if your coverage is below a required percentage of rebuild cost, the carrier can reduce your payout on any claim - including a partial loss.
The Fix Is a Quick Phone Call
Notify your agent after completing significant improvements. Most carriers have a straightforward process for updating the insured value, and the premium increase for accurate coverage is usually modest.
Major renovations are also a good time to review whether the carrier you have still offers the best combination of price and terms, since a renovation changes the profile of your home in ways that some carriers price more favorably than others. The NC Department of Insurance recommends updating your homeowners policy any time your home's structure or value changes materially. Review your home insurance with IronHaven after any major renovation in Wake Forest, Raleigh, or anywhere in North Carolina.
