Whether you’re planning a kitchen remodel, adding a deck, or tackling a full home addition, renovations are an exciting investment in your property. But before the first nail is driven, there’s an important conversation you need to have — and it’s not with your contractor. It’s with your insurance agent.
Home renovations introduce a range of risks that your standard homeowner’s policy may not fully cover. Understanding these gaps before you break ground can save you from financial disaster down the road.
How Renovations Affect Your Homeowner’s Policy
Most standard homeowner’s insurance policies are written to cover your home as it currently exists. When you start a renovation, several things change that can put your coverage at risk.
Your coverage limits may no longer be adequate. If your renovation significantly increases the value of your home — say, a kitchen addition or a finished basement — your existing dwelling coverage may fall short of what it would actually cost to rebuild. It’s essential to update your policy limits before or immediately after completing major work.
Vacant or partially occupied homes face coverage restrictions. If you’re living elsewhere during a major renovation, many insurers have clauses that reduce or void coverage on homes that have been vacant for 30 to 60 days. Make sure you communicate with your agent about your plans.
Construction-related damage may not be covered. Standard homeowner’s policies typically exclude damage that occurs as a direct result of construction activity. If a wall collapses during demolition or materials are damaged by rain through an open roof, you may be left holding the bill. A “Builder’s Risk” policy (also called a dwelling under construction policy) can bridge this gap.
Personal property on-site is at risk. Materials and equipment stored at your home during a renovation may not be covered under your existing policy, especially if they’re stolen or damaged. Ask about additional coverage for building materials.
The Risk of Hiring an Uninsured Contractor
This is where many homeowners make a costly mistake: hiring a contractor without verifying their insurance. If a worker is injured on your property or a subcontractor causes damage to a neighbor’s home, you could be held liable if the contractor doesn’t have proper coverage.
What Contractor Insurance Should Include
Before signing any contract, always request a Certificate of Insurance from your contractor and verify that it includes the following:
General Liability Insurance — This is the baseline requirement. General liability covers property damage and bodily injury caused by the contractor’s work. At minimum, look for $1 million per occurrence and $2 million aggregate coverage. For larger projects, higher limits are appropriate.
Workers’ Compensation Insurance — If a contractor or their employee is injured while working on your property, workers’ comp covers their medical bills and lost wages. Without it, an injured worker may be able to sue you directly. This coverage is required by law in most states for any contractor with employees.
Commercial Auto Insurance — If the contractor or their crew is driving vehicles to and from your property for work purposes, personal auto insurance won’t cover accidents that occur in the course of that work. Make sure their vehicles are covered under a commercial policy.
Umbrella or Excess Liability — For larger renovation projects, it’s worth asking whether your contractor carries an umbrella policy that extends their general liability limits. This provides an extra layer of protection if a claim exceeds their base coverage.
Important: Ask to be listed as an Additional Insured on the contractor’s general liability policy. This means their policy will respond on your behalf if a covered claim arises from their work on your property.
Don’t Overlook the Cleanup
Large renovation projects generate a significant amount of debris — old drywall, lumber, fixtures, roofing materials — and managing that waste is part of the job. Many homeowners and contractors rely on a dumpster rental service to handle the heavy lifting of debris removal. Beyond convenience, having a designated dumpster keeps your worksite organized, which reduces trip-and-fall hazards that could lead to injury claims. A cluttered jobsite is a liability waiting to happen, so proper debris management isn’t just good practice — it’s a risk management strategy.
Before You Renovate: A Quick Insurance Checklist
Here’s what we recommend every homeowner do before starting any significant renovation project:
Call your insurance agent and let them know the scope and timeline of the project
Review your dwelling coverage limits to ensure they’ll reflect the home’s post-renovation value
Ask about a Builder’s Risk policy if your project involves significant structural changes
Verify contractor insurance — request a Certificate of Insurance and confirm it includes general liability and workers’ comp
Request additional insured status on your contractor’s liability policy
Clarify vacancy clauses if you plan to move out during construction
Update your policy once the renovation is complete to reflect the home’s new value
We’re Here to Help
Renovations are a great way to improve your home and your quality of life — as long as you’re protected while it’s happening. If you have questions about your current coverage or want to make sure you’re properly insured before your next project, give us a call. We’re happy to walk you through your options and make sure there are no gaps when it matters most.