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Does Your Homeowner's Insurance Cover Your Home Improvements?

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Defending What You Have Created

If you've recently upgraded your home, have you also upgraded its insurance coverage? Your homeowner's insurance coverage must cover the cost of repairing or rebuilding your house in a natural disaster such as a fire or tornado. If the renovations you've made to your home have increased its worth, you may be underinsured, and if something were to happen, the amount you receive might not be enough to replace what you've worked so hard to achieve.

It is simple to underestimate the expense of home replacement. Numerous individuals mistake the market value of their home for its replacement cost. The market value of a home is the amount paid by a buyer. Replacement cost is the amount necessary to rebuild your home.

When calculating the replacement cost, you must consider both materials and labor. If you have just completed a home renovation job, you have likely observed that the cost of supplies, particularly lumber, has risen significantly. Due to a lack of competent personnel in the construction professions, labor costs are also increasing. Given the need for housing, it is anticipated that both of these patterns will continue for the foreseeable future.

Specific changes can reduce your homeowner's insurance premiums. Some Texans upgraded their plumbing and HVAC systems. They have even installed whole-house generators in response to the ice storm. Others may have installed early detection sensors, such as a water leak detection system for smart homes. These enhancements increase your home's overall security and may reduce the cost of your homeowner's insurance.

Specific home improvements, such as a swimming pool or a fitness center, may impact your liability coverage. If you've made any improvements to your house, chat with your agent about umbrella liability insurance and how it may cover your home and all your assets, including your children's college money and retirement funds.

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