Understanding Home Renovation Insurance

Matt Marandola
Written by Matt Marandola
Updated January 11, 2022
A young couple looking at plans while renovating a room in their house
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Learn what it is and when and whether you need it

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The plans are laid out to start your home renovations so you can finally get your dream kitchen or that pool you’ve always wanted. Though you’re excited about these up-and-coming changes, it’s normal to wonder what happens if things don’t go right. This is where home renovation insurance comes into play. Essentially, you should buy a home renovation insurance policy if your homeowner insurance does not have enough coverage. We’ll walk you through what to consider.

What Is Home Renovation Insurance?

Home renovation insurance covers your house while it’s under renovations or remodels. You may also find it called dwelling under renovation or builder’s risk insurance. 

What Does Home Renovation Insurance Cover?

While homeowners insurance may cover damages to the home, they don’t always cover the mishaps that creep up during the renovation process. Home renovation insurance will cover any damages that occur during the home renovation process. This includes any damages that occur to the property, contractors, or you.

The insurer will also likely cover any damages that occur to surrounding properties. For example, you’re switching from septic to city sewer, and a mishap causes your neighbor’s house to floor. In most cases, renovation insurance will swoop in and save the day.

How Much Does Home Renovation Insurance Cost?

The cost of home renovation insurance will range anywhere from $29 to $250 per month. There is no way to pinpoint the price, as it depends on the size of the renovation project at hand. For example, a floor replacement may only require you to spend $29 for a single month, while a major renovation may cost upwards of $250 for several months.

When Do You Buy Home Renovation Insurance?

An insurance agent checking paperwork with homeowner
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First, call your homeowners insurance first to see what your current policy covers. Then, purchase additional insurance either from your current provider or another company. Once you’ve decided on the home improvement insurance that’s right for you, you’ll want to wait until your policy is in effect before starting renovations or remodels.

The insurer may need to send out an agent beforehand to see the extent of the repairs needed. This will help the insurance company figure out how much coverage they need to provide for you based on how risky the type of renovation or remodel is.

Do Home Renovations Increase Your Regular Homeowners Insurance Rates?

Certain renovations can affect your homeowner’s insurance, such as turning a bedroom into an office space or installing a pool. You also generally need to insure a certain percentage of the home’s value to keep your insurance coverage. So if the value of your home goes up 25% because of these renovations, then it’s likely you’ll need to insure the difference that now exists.

Do You Really Need Home Renovation Insurance?

While you may not need separate insurance to cover the home improvements, you should always check to see that your homeowner’s insurance is enough. Pairing this with a locally insured, licensed, and bonded contractor should net you the same results as buying home renovation insurance.

Emergency home repairs after a natural disaster are often covered under homeowners insurance policies. So you’re not likely going to need to buy home renovation insurance in these unfortunate events.

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