Americans have been busy renovating their homes in record numbers.
Home renovation spending grew 15% in the last year to a median $15,000, according to a survey by home renovation website Houzz. Higher-budget projects (accounting for the top 10% of project spending) saw an increase to $85,000 or more in 2020, compared with $80,000 in the two years prior.
Let your insurer know. Ideally, before you start renovations.
For instance, if that new kitchen increased the cost of rebuilding your home after a claim, your current homeowner’s insurance limits may not be high enough to reimburse you if you have a total loss. Here are the main home renovations to inform your insurer about (the prices are from 2020 before construction costs went through the roof, so current averages likely are higher):
Kitchen and bathroom upgrades: A kitchen upgrade will cost an average of $35,000, while adding an average value increase of $20,000 to your home.
Complete kitchen renovations typically have a higher return on investment (ROI).
If you upgrade your electrical or plumbing systems during a kitchen or bathroom renovation, you could qualify for an insurance discount.
Flooring: New or refinished wood flooring also adds value to your home.
According to the National Association of Realtors’ 2020 Remodeling Impact Report, homes with hardwood floors will likely see a 100% return as the average $3,000 cost to refurbish them adds $3,000 in value.
Installing wood flooring by replacing another floor, usually has a 91% return on investment. So a $10,000 wood flooring installation can add around $9,000 in value to your home.
Siding: In some parts of the country, repainting your home’s exterior can result in a 112% ROI. The average cost to paint a house last year was $2,900 — the low at $650 and the high end $6,200.
Adding square footage: While a home expansion does not always add value to your home in the resale market, it will cost more to rebuild in case of a total loss.
You may also need additional insurance if the space you added is not inside your home.
Final tips: When doing a remodel, make sure your contractor is licensed, insured and surety bonded before signing the contract.
Also, make sure the contractor has general liability insurance and workers’ compensation insurance.
For more information contact
ROX Insurance at 800-690-7660.