Remodeling? Make sure you are covered
November 4th, 2007 Categories: Remodel
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I asked Kirk Chester my insurance agent, what happens when people remodel, what does that do for their insurance? He sent me an interesting article.
I will find out about all the equity increse we have experienced over the last few years.
The National Association of Home Builders Estimates that 26 million homes are remodeled yearly. (nahb.org) This is one in four homes in America, yet for the money that homeowners are putting into their homes they pay little attention to the insurance issues related to remodeling. A survey conducted by Marshall & Swift/Boeckh found that a whopping 64% of U.S. homes are underinsured, each by an average of 27%.
The first item on the agenda should be how much the project will increase the value of the house, says Don Beery, vice president and partner at Eustis Insurance in New Orleans and a spokesman for the Independent Insurance Agents of America. The organization estimates that one fourth of remodeling projects add at least 25% to the value, yet most homeowners don’t increase their coverage.
The question remains then, have you checked your coverage recently? Minor improvements such as painting and carpeting probably won’t trigger an increase. But a new deck, second bathroom, larger kitchen or other remodel jobs that increase square footage, change the structure or otherwise add value come with the need for more coverage. If you do extensive remodeling, you might want to have your house appraised to make sure you have adequate amount of coverage. You can often times get an appraisal free through a local insurance agent.
This is especially true in places like the City of Cottonwood Heights were prices have really risen.
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Hello. Thank you for bringing the important issue of undervaluation and underinsurance to your readers.
Just to update you on the current status of home underinsurance, the most current (2006) statistics from Marshall & Swift / Boeckh show that an estimated 58% of American homes are undervalued for insurance purposes by an average of 21%. These numbers have imporved significantly since the 2003 figures you have cited in your article, but more can be done.
Homeowners - remember to let your agents know about your remodeling projects! It’s better to pay a bit more in premium than to find out after the ashes have cooled that you don’t have enough to rebuild!
Marsha Berenson
Media Coordinator
Marshall & Swift / Boeckh
www.msbinfo.com; www.accucoverage.com