Policyholders need help avoiding home renovation risks

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Failing to budget realistically, not complementing the home’s original architecture, and making decorating choices that are fashionable rather than functional are common do-it-yourselfer faux pas, according to Nationwide. (Elnur Amikishiyev/Adobe Stock)

My husband and I are not handymen. But after more than a decade in our mid-century ranch-style home, the place began to demand attention.

That’s how I got to the middle of a typed, single-spaced page of planned updates to our home that we hope to accomplish before the end of this year. The list includes several smaller, subtle projects, such as updating old light fixtures and faucets, as well as a few more expensive projects, such as replacing a large sliding glass patio door.

We’re certainly not the only homebodies who took a long hard look at our space during the pandemic and decided it needed some love.

Harvard’s Joint Center for Housing Studies reported in 2021 that although the U.S. economy shrank 3.5% in 2020, spending on home renovations and repairs grew more than 3% to nearly $420 billion. dollars.

Forbes reported more recently that home improvement spending slowed in early 2022 due to inflation and supply chain issues. But there remains a wave of homeowners who rushed to refinance earlier this year to beat the next interest rate hike and use some of their hard-earned home equity to enrich the nest.

Chubb addresses these housing trends in its fifth annual Homeowners Risk Report, which Mary Parsons of Chubb Personal Risk Services writes about in the June/July issue of NU P&C magazine. She notes that more than a third of homeowners in the United States and Canada have undertaken renovations in the past year. Many of us have chosen to undertake these renovations ourselves without hiring a contractor, and many have done so without considering the associated real estate risks.

What are the most common renovation mistakes? Failing to budget realistically (guilty!), not complementing the home’s original architecture, and making decorating choices that are fashionable rather than functional are common do-it-yourselfer faux pas, according to Nationwide. For owners who hire contractors, the insurer advises against rushing to judgment. It’s important for owners to interview more than one contractor, check references, and ask lots of questions to make sure they hire someone who is affordable and easy to work with.

Homeowners who care about value can choose to skip the trendy decorating ideas and go straight to the renovations that tend to impress buyers the most. According to Better Homes & Gardens, these updates include kitchen and bathroom renovations, new lighting, and smart landscaping that give the home curb appeal.

All of these projects are an opportunity for home insurance agents to intervene with their clients, who may not realize the high likelihood of their property suffering water damage during a renovation, or that certain updates, such as finishing a basement or installing a swimming pool, will require additional insurance coverage.

“To help ensure that the renovation goes smoothly, agents and brokers should discuss with their clients whether to hire a reputable contractor who will create a written plan outlining the details of the project or have the owner draw up himself a detailed plan,” writes Parsons. “It is also important to have insurance to cover the house and the project, as losses can occur during the renovation process, and insurance coverage can be compromised if the insurance company is not informed when renovations are planned.

Guess it’s time to call my own home insurance agent.

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