You Just Renovated Your Home. Now Your Insurance Company Might Screw You Over.
You did it. New kitchen. Upgraded bathrooms. Beautiful new porch.
Your home is now worth significantly more than before.
But here’s what nobody tells you: Your insurance company doesn’t know about any of it.
And that could cost you tens of thousands of dollars.
The Problem
Home renovation spending in the U.S. hit $315 billion in 2017—and most people aren’t updating their homeowners insurance to reflect their upgrades.
This isn’t a minor oversight. It’s a financial disaster waiting to happen.
The Disaster Scenario
You spent $50,000 on a new kitchen. Then a fire breaks out.
Damage: $200,000.
You’re insured for $300,000. You should be covered, right?
Wrong.
Your insurance company sends you a check for $149,000.
You’re out $51,000 out of pocket.
Why This Happens: The 80/20 Rule
Insurance companies require you to insure your home for at least 80% of its replacement cost (what it would cost to rebuild today).
If you don’t, your claim gets prorated. You only get paid the percentage of replacement cost you actually have coverage for.
Example: Your home’s replacement cost is now $500,000, but your policy only covers $300,000 (60%). A $200,000 fire claim gets paid at 60% = $120,000 (minus deductible).
What You Need to Do
-
- Make a list of all renovations (cost, date, what was upgraded)
- Call your insurance company TODAY (not email, not later)
- Ask: “Do I need to increase my coverage? What’s my replacement cost now?”
- Get inflation guard coverage if you don’t have it
- Update your policy in writing
The Bottom Line
Your renovations are an investment. Don’t let an outdated insurance policy turn that into a financial disaster.
Updating your coverage costs way less than paying out of pocket for damages.
Call your insurance company today. Your future self will thank you.
