Monday, October 3, 2011

Remodeling? Make Sure Your Insurance is Up to Par

According to the BuildFax Remodeling Index (BFRI), remodeling reached a record high during the month of July. The company attributes this to the many who are choosing to stay put and invest in home improvements, as opposed to putting their home on the market.

The latest BFRI indicates that residential remodeling activity registered the 21st-straight month of year-over-year gains, demonstrating that many Americans are continuing to remodel their current homes. The data shows July 2011 as the month with the highest level of remodeling activity since the Index was introduced in 2004.

When it comes to remodeling your home, there are important insurance issues to take into consideration. For example, if you are planning on adding onto your home, evaluate the materials used. Wood-framed structures are highly flammable and will cost more to insure, whereas cement- or steel-framed structures will cost less because they are less likely to succumb to fire or adverse weather conditions.

Once your addition or remodel is completed, it’s critical to make sure your insurance is in line with your home improvements. Many homeowners neglect to calculate the increased value of their home caused by a remodel/addition and secure the necessary coverage. If you have a "guaranteed replacement value" policy, which all homeowners should, noting the new value of your home post-remodel is essential.

In all cases, the following steps can help you save money on rates: