Homeowners who are planning to do some home improvement work are making themselves vulnerable to financial risks if they do not buy home insurance.
According to Independent Insurance Agents of America based in Washington, D.C., home improvement increases the market value of your property. Therefore additional home insurance coverage is needed during and after improvement work.
A telephone survey of about 1,324 homeowners conducted by the Independent Insurance Agents from March 1 to 7, 2008, showed that 60 percent of homeowners who finished major structural improvements on their homes did not update their home insurance policies to cover their properties’ increased value.
Also, 75 percent of respondents who are planning to make improvements on their homes have not taken into consideration the potential impact of the improvement work on the home insurance cost.
The agents’ group noted that 25 percent of home improvement work increased a property’s value by over 25 percent. The findings of the agents’ group’s survey have an error margin of plus or minus 1.1 percent.
Some insurers have warned homeowners that should a loss happen or occur during home improvement work, they may not be covered if they opted not to get home insurance.
Manager of Ohio Casualty Group’s personal property underwriting Deb Dehne pointed out that any kind of home improvement that will add over five percent to the market value of your property should be reported immediately to your insurer.
She added that reporting the improvement work could make a significant difference in the total amount that you would be able to receive when you filed for home insurance claims.
Meanwhile, the liability part of a home owner insurance policy covers damages or injuries in the work area but only for a limited amount. Therefore, it is necessary that you hire professional workers who have their own disability, accident and liability insurance to protect you from expensive lawsuits.