Home Additions You Should Avoid for Insurance Purposes

Adding new additions to the home are often the finishing touches to make your home more comfortable. However, each major upgrade may bring in new safety issues and present higher risks, which can increase homeowners insurance costs.

Home Offices

Setting up a home office will likely increase homeowner's insurance costs. You'll probably need to increase liability coverage on the home if you plan on having clients visit at the home.

In addition, you will need to provide medical coverage and cover the cost of potential lawsuits if an accident should occur. Don’t forget, you'll need to increase personal property coverage for stored inventory on the premises, office equipment and furniture, computers and so on.

Swimming Pools

Most standard homeowners' insurance policies cover you for $100,000 in liability coverage. If you're considering the addition of a new swimming pool, it's highly recommended that you increase coverage amounts to at least $300,000 to $500,000. Some insurance agents may even recommend the separate purchase of an umbrella policy for a million dollars in case of accidental deaths.

In addition to an increase in liability costs, you'll need to factor in higher insurance costs for rebuilding the pool if it should be damaged or destroyed by a natural disaster.

You’ll also need to pay for an adequate fence with a self-locking gate mechanism that meets insurance requirements and some city code requirements.

Garages

Garages are a welcome addition to most homes where people are intending to stay in the house for several more years. Of course, garages need to be insured and may also increase overall risks to the home.

Many people store flammable liquids in garages or operate workshops with electric tools that can ignite a fire and insurance premiums will reflect this additional risk to the home.

Additional Rooms

Adding a family room, bedroom, game room or home theater increases the square footage of a home. Once the size increases, it will cost more to rebuild and therefore, more to insure.

Wood-burning Stoves or Fireplaces

Installing a new fireplace or wood-burning stove not only increases your homeowner's premium because of increased risks, but it carries several other related costs that you may not have considered.

You'll have to pay for the cost of the wood stove or fireplace. You should hire a contractor that can install the unit to meet code, which may be an insurance requirement. Besides paying a higher premium, you'll be expected to maintain the unit and have the chimney cleaned regularly by your insurance company to prevent fires.

New home additions are typically expensive to install. Therefore, before starting the project or hiring a contractor, speak with your insurance agent to learn how each upgrade could affect your San Diego Auto Insurance limits and costs.