How home renovations affect your home insurance
Some upgrades lower your premium, some raise it, and a few can leave you underinsured if you never tell your carrier. Here is what to report and when.
By Elijah Canfield, Founder, Hire Best Pros · Updated September 9, 2026
Elijah Canfield is the founder of Hire Best Pros. He writes and edits the site's consumer guides, with a focus on how home service and moving projects are priced, scoped and compared.
Any project that changes what it would cost to rebuild your home, or changes the risk inside it, belongs in a conversation with your insurer. System upgrades such as roofing, wiring and plumbing often help your price. Additions, high end finishes and pools usually raise it. The expensive mistake is finishing the work and never updating the dwelling limit.
Key points
- Call your insurer before the project starts if it adds square footage or changes major systems.
- Roof, electrical, plumbing and heating upgrades are the ones most likely to lower a premium.
- Additions and high end finishes raise the rebuild cost, so the dwelling limit should move with them.
- Confirm who carries liability and workers coverage on site before anyone starts work.
Upgrades that usually help your price
Insurers price condition. Replacing the systems most likely to cause a claim tends to be viewed favorably, particularly when the old ones were near the end of their life.
- A new roof, especially in a hail or wind exposed area
- Replacing knob and tube or aluminum wiring, or an outdated electrical panel
- Repiping older supply lines and replacing an aging water heater
- Adding monitored security, smoke detection or automatic water shutoff
- Impact resistant windows or storm shutters where those risks apply
Planning a systems upgrade?
Read signs your electrical system needs updatingProjects that usually raise it
Anything that makes the home more expensive to rebuild, or adds a new way for someone to get hurt, tends to push the number up. That is not a reason to avoid the project, only a reason to budget for the change.
- Additions, finished basements and converted attics that add livable square footage
- High end kitchens, custom cabinetry and premium stone or tile
- Pools, hot tubs, trampolines and large decks, which are liability questions as much as property ones
- Home based business use, which standard policies often exclude
Coverage during the work itself
Before a crew starts, confirm the contractor carries general liability and, where required, workers compensation, and ask for certificates directly from the insurer rather than a copy from the contractor.
For large projects, ask your own carrier whether the policy covers building materials on site, theft from the property and any period where the home is unoccupied. Vacancy clauses catch people out during long remodels.
Vetting a contractor before work begins?
Read how to hire a remodeling contractorUpdate the dwelling limit when the work is done
The dwelling limit is meant to reflect the cost to rebuild what you now own. A finished basement or a new addition that never made it into the policy is a shortfall waiting to appear at the worst moment.
Keep the paperwork. Permits, invoices and photographs make it far easier to prove what existed if you ever file a claim.
Common questions
- Do I have to tell my insurer about a remodel?
- Tell them about anything structural, anything that adds square footage, and any change to roofing, wiring, plumbing or heating. Cosmetic work such as paint usually does not need reporting, though high end finishes can still affect rebuild cost.
- Will a new roof lower my premium?
- Often, particularly in hail and wind exposed areas or when the old roof was near the end of its life. Report it when it is finished, since it will not be applied automatically.
- Does my policy cover a contractor who gets hurt at my house?
- Do not rely on it. Verify the contractor's own liability and workers compensation coverage before work starts, with certificates from their insurer.