The Impact of Home Improvements on Insurance Costs  

Updating your home can boost both comfort and value, but it may also affect your insurance needs. In Phoenix, AZ, where renovations are common due to aging housing stock and extreme weather, it’s especially important to understand how improvements might impact your homeowners policy.

Failing to update your coverage after a major renovation could leave you underinsured or facing claim complications down the line.

How Renovations May Affect Insurance Costs

Depending on the type of upgrade, your insurance premium could increase or decrease. The following are a few common examples:

• Kitchen or bathroom remodels—Raising your home’s replacement cost means you may need more coverage to fully protect it.

• Roof replacement—A new, impact-resistant roof may lower your premium due to reduced weather damage risk.

• Plumbing and electrical updates—Modern systems can reduce fire and water damage risks, which may lead to a rate adjustment.

• Room additions or finished basements—Expanding your square footage typically increases your home’s insured value.

Why You Should Update Your Policy

Even small improvements can change your home’s overall value or risk profile. Updating your policy may help ensure the following:

• Accurate coverage limits—Your dwelling limit should reflect the cost to rebuild your home as it currently stands.

• Eligibility for discounts—Upgrades like security systems or energy-efficient systems may qualify you for savings.

• Claims protection—If your insurer isn’t aware of improvements, you may face delays or disputes if you need to file a claim.

Consult Before You Build

Before starting a renovation, it’s wise to check in with your insurance agent. A provider like Driven Insurance Services can help you understand how your project may affect your policy and what documentation you’ll need. Contact us today to learn more.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.