Why Your Home Renovation Might Void Your Insurance, Unless You Do This First

Home renovations are exciting, new spaces, increased value, and the satisfaction of seeing your vision come to life. But what many Arizona homeowners don’t realize is that certain updates can impact your insurance coverage in ways that could leave you financially exposed.

​Why Renovations Affect Coverage

Your home insurance is based on its current structure, features, and replacement cost. When you make major changes, like adding square footage, upgrading finishes, or installing a pool the cost to rebuild your home increases. If your insurer doesn’t know about these changes, your coverage limit may no longer be enough to fully protect you.

Examples of Renovations That Require Policy Updates
• Adding a detached garage or guest house
• Installing a swimming pool or hot tub
• Upgrading your kitchen with high-end appliances and custom cabinetry
• Building a deck, patio, or outdoor kitchen
• Adding solar panels or major energy systems

What Happens If You Don’t Update

If a claim occurs and your insurer determines the home was underinsured due to unreported changes, they can:
• Deny part of the claim
• Reduce the payout based on outdated replacement costs
• Cancel your policy for misrepresentation

The Right Way to Renovate
1. Contact your agent before starting to discuss how the project may impact your coverage.
2. Increase limits if needed to reflect the home’s new replacement value.
3. Consider a builder’s risk policy for large-scale renovations to protect the project itself.

Bottom Line

Renovations add value to your home, but only if your insurance keeps pace. A quick call to your local agent before breaking ground can ensure that your dream project doesn’t become a financial nightmare.