As the hot South Florida summer slows down, many Hollywood and Broward County homeowners start thinking about making upgrades. Whether you’re planning a new roof, a kitchen remodel, or finally installing that pool, it’s exciting! However, your home insurance needs to keep up with your home’s changes. It is absolutely essential that you talk to your Finney Insurance agent before and after any major project. This simple step protects you from being underinsured or having a claim denied due to changes you didn’t report. In fact, a 2024 survey found that 55% of homeowners who completed major renovations in the past two years have not adjusted their insurance policies, leaving them at serious risk! (Source: Nationwide Survey).
- Key Takeaways
- Why Must I Tell My Insurance Agent About My Renovation?
- Does my home’s value really change that much?
- Which Renovations Increase My Coverage Needs and Cost?
- Which Renovations Can Actually Lower My Insurance Bill?
- What Documentation Does My Agent Need?
- Fall Renovation FAQs
- Conclusion
- Frequently Asked Questions (FAQs) About Renovations and Home Insurance
- Does my homeowners insurance automatically cover the construction materials I buy?
- If I get a big discount for a new roof, can my insurance company still drop me later?
- Will installing a home security system actually lower my insurance premium?
- What is the difference between Actual Cash Value (ACV) and Replacement Cost Value (RCV) for my renovated items?
- If I have a renovation and don't tell my agent, will my claim definitely be denied?
Key Takeaways
- Reporting is Mandatory: You must inform your Finney Insurance agent before and after any significant home renovation (e.g., kitchen remodel, roof replacement, pool installation).
- The Risk of Underinsurance is High: Not reporting a costly renovation (like a high-end kitchen) means your Dwelling Coverage limit won’t be high enough. If your house is destroyed, the insurance payout will only cover the cost of the old structure, leaving you to pay the difference to rebuild the new, expensive version.
- Higher Value = Higher Coverage: Any project that increases your home’s replacement cost (e.g., room additions, luxury finishes) requires you to increase your Dwelling Coverage (Coverage A) limits to protect the new investment.
- Pools Require Higher Liability: Adding a swimming pool significantly increases your liability risk (it’s an “attractive nuisance”). Insurers will strongly recommend, and may require, you to increase your Personal Liability Coverage (often to $500,000 or more).
- Some Upgrades Save You Money: Renovations that make your home safer, especially in Florida, can lead to discounts. Replacing an old roof, installing wind mitigation features (like hurricane clips), or upgrading old plumbing/electrical systems reduces your risk of fire and wind claims, often resulting in premium savings.
- Contractor Insurance is Crucial: Your homeowners policy does not cover damage or injury caused by the contractor’s work. Always verify that your hired contractor has their own current General Liability and Workers’ Compensation insurance to protect you from lawsuits if they or their workers are hurt on your property.
- Document Everything: Keep all receipts, contracts, permits, and inspection reports. This paperwork is vital for proving the new value of your home to your insurance company.
Why Must I Tell My Insurance Agent About My Renovation?
The reason you must tell your insurance agent is twofold: to protect the higher value of your home and to protect yourself from bigger risks. If you do not report that you added a $50,000 kitchen, your current policy limits might only cover the cost of your old, smaller kitchen. This means if a fire occurs, you would have to pay the extra cost to rebuild the new, more expensive kitchen yourself. If renovations are not reported, there is the potential that your current homeowners insurance policy limits will not be high enough to cover any losses (Source: HomeFirst Agency).
Does my home’s value really change that much?
Yes, a renovation significantly changes the amount of money it would take to rebuild your home if it were destroyed. Home insurance is based on this replacement cost, not the market value. When you upgrade to high-end appliances, granite countertops, or custom cabinets, the replacement cost goes way up. You need to increase your Dwelling Coverage limit (Coverage A) to match that new, higher cost.
Which Renovations Increase My Coverage Needs and Cost?
Will adding a swimming pool make my insurance go up?
Yes, adding a swimming pool is one of the biggest changes you can make that increases both your home’s value and its risk, making higher insurance costs likely. Pools are considered an “attractive nuisance,” which means they draw people in, especially children, and increase the chance of an injury or drowning. Because of this added risk, insurers recommend increasing your Personal Liability Coverage from the standard $100,000 to at least $500,000 (Source: JW Cotter).
- Property Coverage: Your in-ground pool is usually covered under the Other Structures Coverage (Coverage B) part of your policy, which typically protects things not attached to your house, like sheds or fences. You may need to increase this limit to cover the pool’s value.
- Safety is Key: To keep your premium increase minimal, your insurer will likely require you to install safety measures like a fence with a latch and possibly a pool alarm, which are also often required by Hollywood local laws.
Do interior remodels like kitchens and bathrooms affect my policy?
Yes, kitchen and bathroom remodels are two of the most valuable areas of your home, and upgrading them can significantly impact your policy. For example, if you spend $30,000 on new cabinets, countertops, and appliances, you must increase your Dwelling Coverage to protect that new, higher investment (Source: Progressive). Custom features like skylights or expensive tile work may also require specific attention to ensure your policy accounts for their unique value and replacement cost.
What about adding a new room or a screen enclosure?
Any structural changes that increase the total square footage of your home, such as building a new bedroom or adding a permanent screen enclosure, must be reported. More space means a higher cost to rebuild, and therefore your Dwelling Coverage limit must be raised. Even structures that are separate from the house, like a detached garage or a pool house, need to be accounted for under your Other Structures Coverage.
Which Renovations Can Actually Lower My Insurance Bill?
Can replacing my roof really save me money on my premium?
Yes! In Florida, replacing your roof is one of the best ways to earn insurance discounts because a new roof reduces the biggest risk for insurers: wind and water damage. Insurance companies are required to offer discounts for features that make your home safer from hurricane-force winds (Source: FL Department of Financial Services).
- Age and Materials: If your roof is older (over 15-20 years old), replacing it with materials that meet the current Florida Building Code can lead to substantial savings.
- Wind Mitigation: The biggest savings come from Wind Mitigation Discounts. A qualified inspector will check features like your roof covering, roof deck attachment, and the connection between the roof and walls (such as hurricane clips or straps). Homes built in compliance with the 2001 Florida Building Code or later are often eligible for major premium credits because they are much more wind-resistant (Source: Progressive).
What other upgrades might lead to a discount?
Upgrades that make your home safer and reduce the risk of a claim often lead to lower rates. These include:
- Security Systems: Installing a centrally monitored fire, smoke, or burglar alarm system often qualifies you for a protective device discount.
- Electrical/Plumbing Upgrades: If your Hollywood home has older electrical wiring (like knob-and-tube) or old plumbing, upgrading to modern systems reduces the risk of fire and water damage claims, which are common and costly (Source: Progressive). Fire and lightning are the most expensive claims, averaging over $88,000 per incident (Source: III, 2023 data).
What Documentation Does My Agent Need?
What paperwork should I keep during and after a renovation?
You must keep detailed records of your renovation work, as this documentation is required to update your policy and will be vital if you ever file a claim. You should collect and save:
- Receipts for all materials and labor costs.
- The contract signed with your licensed contractor.
- Before and After Photos of the project.
- Permits and Inspection Reports from the city or county (these prove the work was done to code).
This paperwork proves the new, higher value of your home, ensuring your insurance policy is correctly updated to cover the full cost of rebuilding your improved home.
Fall Renovation FAQs
What if my contractor or I accidentally damage something during the work?
Your homeowners policy typically does not cover damage caused by the renovation or remodeling project itself. If you drop a hammer and crack a new tile, your insurance won’t pay for it. For big projects, your contractor should have their own General Liability Insurance to cover accidents they cause, such as their tools causing a fire. Always ask to see their insurance certificate before they start work!
What about my belongings while the work is happening?
Your personal belongings are still covered by your policy, even if they are moved into a garage during a kitchen remodel. However, you should talk to your agent if you have a lot of expensive materials (like new appliances or custom cabinets) stored on-site before installation. These materials could be covered by your policy, but it’s best to confirm the coverage limits.
If my policy increases, is an Umbrella Policy a good idea?
If your renovations have made your home more valuable and you’ve added high-risk features like a pool, an Umbrella Insurance Policy is an excellent idea. An Umbrella Policy provides an extra layer of liability protection above and beyond your homeowners and auto policies, typically starting at $1 million in coverage. This is smart financial planning when your assets are growing.
Conclusion
Renovating your Hollywood home is a fantastic way to invest in your future and improve your quality of life. However, failing to update your insurance policy is one of the biggest and costliest mistakes you can make. The average home insurance claim severity is on the rise (reaching over $20,000 per claim in 2023, Source: III), making it critical that your Dwelling Coverage is high enough to replace your newly upgraded home.
Frequently Asked Questions (FAQs) About Renovations and Home Insurance
Does my homeowners insurance automatically cover the construction materials I buy?
No, your standard homeowners policy generally does not automatically cover expensive building materials (like lumber, windows, or custom cabinets) once you purchase them and store them on-site for a major renovation. These materials are technically not yet part of the structure, and they face a high risk of theft or damage. You should discuss the renovation with your agent, as large projects may require a temporary “Builder’s Risk” policy or a specific endorsement to cover the materials and the construction site risks.
If I get a big discount for a new roof, can my insurance company still drop me later?
While getting a new, fortified roof significantly improves your eligibility and lowers your premium, it does not guarantee your insurer will never drop you. However, Florida law provides some protection: insurers cannot refuse to renew a homeowners policy solely because the roof is over 15 years old if a certified inspection shows it has at least 5 years of useful life remaining (Source: FL Statutes § 627.7011). A new roof greatly reduces the likelihood of non-renewal due to roof age, but other factors (like frequent claims or regional market changes) can still affect your policy.
What is the difference between Actual Cash Value (ACV) and Replacement Cost Value (RCV) for my renovated items?
Replacement Cost Value (RCV) is what you want. It pays the actual cost to buy a brand-new version of your lost or damaged item, without taking away any money for age or wear-and-tear. Actual Cash Value (ACV) is what the item was worth right before the loss. For example, if you bought a new refrigerator for $2,000, but it was 5 years old at the time of the fire, an ACV policy might only pay $500. After a costly renovation, ensure your policy uses RCV so you can replace your new upgrades fully.
If I have a renovation and don’t tell my agent, will my claim definitely be denied?
A claim is not automatically denied for failing to report a renovation, but your claim payout will be severely limited by the concept of underinsurance. If you had $300,000 in coverage before your renovation, and the new structure would cost $400,000 to rebuild, the insurer will only pay up to that original $300,000 limit (or less, due to co-insurance penalties). You would have to personally cover the $100,000 gap, defeating the purpose of having insurance. It is always better to update your coverage to match the full value of your home.
Don’t let your exciting renovation become a future financial risk. Before the dust settles, talk to the experts who know the Broward County market.
Contact Finney Insurance Corporation today! We will review your renovation plans, make sure you get all the discounts you qualify for (like that new roof credit!), and ensure your policy fully protects the higher value of your beautiful, upgraded Hollywood home. Give us a call or visit our office to schedule your policy review!
