Making improvements to your home is always a great idea. It increases the property's value and can make it more comfortable for you and your family.

But did you know that making certain types of home improvements can also affect your homeowners’ insurance costs? Take a look at how your insurance premiums might be affected by remodeling your home.

Replacement Costs Vs. Market Value

The most important factor in determining the cost of homeowners' insurance is the replacement cost of your home. Replacement cost is an estimate of what it would cost to rebuild the entire structure and replace all its contents if it were destroyed in a fire or other disaster. This cost is usually much higher than the market value, which is what you could expect to get if you sold your house today.

So, when you make improvements to your home, like adding a new master suite or updating the kitchen, this will increase the replacement costs and may result in higher insurance premiums. It would cost more to rebuild the house with these improvements than without them. So your insurer will need you to pay more to protect your home better.

Safety Improvements

Making safety improvements to your home can actually lower your homeowners' insurance premiums, as they reduce the risk of damage or injury due to accidents or natural disasters. Installing smoke alarms, fire extinguishers, burglar alarms, and storm shutters are all examples of safety improvements that may reduce homeowners' insurance costs.

Additionally, installing hurricane-proof windows or reinforcing roof materials with steel supports can also help lower premium costs in areas prone to severe weather events like hurricanes and tornadoes. Your insurer may offer a discount if they think these safety improvements will reduce the risk of damage or injury to your home.

Should You Inform Your Insurer When You Make These Improvements?

You need to inform your insurer when you make any improvements to your home that would increase the replacement cost. This will help them better calculate the risk and determine the appropriate premium. Revising your insurance policy to reflect the new changes is essential so that you are not underinsured in case of an unexpected event.

If you make safety improvements, you should also inform your insurer. Most companies will offer a discount if they think the improvements reduce the risk of damage or injury to your home. But these discounts might not be the same across the board, so ask your agent for more details on what you can expect.

If you have any questions about how home improvements may affect your homeowners' insurance premiums, speak to a local agent. They can provide you with the most accurate information and help you make sure your home is properly insured.