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Homeowners insurance provides financial support for unexpected and unpreventable instances of damage. It can assist if a tree falls on a home during a storm, or if a faulty appliance sets the house on fire.

For homeowners planning significant restoration work, home insurance may not offer much support. The cause of the repair or renovation is typically the deciding factor in coverage.

So, will your home insurance cover your project? Let's take a closer look.

Restoring a Home

Home insurance does not provide coverage for home restorations. Home restorations are typically those that update a home to its previous condition. Although this process can raise the value of the home, insurers won't fund it. So, those who wish to update an older home will likely do so out of pocket.

Policies usually do not cover renovations to the home either. So, if you wish to make the home larger, your insurance cannot help.

Emergency Restorations

Sometimes, restorations are necessary, not cosmetic. For instance, if a fire breaks out in a home, it will likely cause significant damage. In this situation, the insurance company will likely cover the costs of restoration repairs up to the dollar amount listed on the policy. However, the provided funds may only be used to restore the property to its previous condition. The homeowner will still likely have to pay for further updates.

Watch The Value

If you decide to pay for restorations out of your own pocket, your home will likely be worth more than it once was. It may even be worth more than what you invested in the property.

As a result, it is important to update your home insurance. If the home suffers damage now, you may need to file a claim. The policy will need to have a higher limit because the home has a higher value. Because of that, it will cost more to restore the home in the event of fire and other damage. So, be sure to speak to your home insurance agent about the changes you make. They can impact your policy in various ways.

Accidents happen all the time, even if we'd rather they didn't. Even though your home insurance policy won't cover elective restoration or renovation work, it can be invaluable when disaster strikes. Still, it's important to ensure your coverage matches your needs and your home value.

Bruening Insurance can help with this assessment. Contact us today to learn more.

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