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Renovations during pandemic could impact home insurance

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Posted at 8:40 AM, Mar 16, 2021
and last updated 2021-07-05 18:58:06-04

While working from home has largely saved people money without commutes, business wardrobes and eating out, it could cost you more in other areas.

“If you're working from home, you may have additional equipment that you might not have had otherwise, which can be expensive to replace, and so, you know, it's important to know that your homeowners insurance policy, the very basic level only covers about $2,500 of work from home equipment,” said Stephen Kates, a certified financial planner and analyst at Bankrate.

Kates is warning people their home insurance may not cover their new work setups.

He mentioned extra equipment, which is worth having a conversation with your employer about, because their insurance may cover some of it.

As far as turning a bedroom into a home office, that's likely not going to have an impact on home insurance, but other remodels that have become popular during the pandemic could.

“Improving, you know, the countertops, the cabinets, you know, any new appliances that you might have in your kitchen, can add to the value of your home and therefore it's important to update your home insurance to make sure that all of those new things are fully covered,” said Kates.

About three out of every five homeowners did a home improvement project just in the first half of the pandemic last year, according to NerdWallet.

Kates says renovation insurance is something to consider to cover expensive materials or unexpected issues that might come up during a project.

Backyard pools have become a hot commodity as well. Some home insurance companies see them as added liability, which could increase your premium.

They may also require fences or other security features.

Security and other projects are something that could earn you a discount.

“So, when you think about removing fireplaces, security systems, upgrading electricity or plumbing, those are things that in a big way can improve your home. And then, if you think about the roof as one of the biggest things that's going to protect your home from weather or other elements,” said Kates.

None of this should drastically change your home insurance policy unless you've done a total gut of the home.

Renters should also look into their rental insurance policies to see if it covers extra work equipment they've brought into the home.