Home improvement activity has cooled from its pandemic peak but remains substantial. Harvard’s Joint Center for Housing Studies estimates owners spent roughly $481 billion in 2023 on improvements and repairs, with kitchens, baths, exterior replacements, and energy-efficiency/electrification projects leading the mix. Exterior replacements delivered some of the strongest resale ROI in 2024, while high‑end interior remodels typically returned less at resale (2024 Cost vs. Value). New incentives are rolling out state‑by‑state for heat pumps, insulation, and electrical upgrades under the Inflation Reduction Act’s Home Energy Rebates. Regardless of the scope and cost of your project—from a new roof to solar + battery storage or an EV‑ready panel upgrade—it will affect your homeowners insurance, so plan coverage before work begins.
Talk to your homeowners insurance agent before you start.
Before you sign a contract or order materials, confirm how construction will be insured and how your limits will change at completion. The 2020 U.S. Houzz & Home Study: Renovation Trends shows kitchens and baths remain top projects and the median spend among renovating homeowners was about $24,000. Insurers and consumer authorities advise notifying your carrier early to confirm protections during construction (e.g., theft/vandalism of building materials, water backup) and to adjust Coverage A (dwelling), Coverage B (other structures), and Ordinance or Law limits after completion (Insurance Information Institute; Ordinance or Law).
If you’re doing portions yourself, ask your insurer about project‑phase endorsements. Many owners raise water backup/sump overflow limits during plumbing/kitchen work and consider equipment breakdown coverage for new mechanicals and smart systems (Triple‑I guidance). Also discuss occupancy: policies often restrict or reduce certain coverages if a home is unoccupied for an extended period (commonly around 60 days), or when major structural work is underway—your carrier can clarify requirements or suggest a course‑of‑construction solution to avoid gaps (Triple‑I).
If friends or family will help, confirm you have sufficient liability protection. Consider increasing no‑fault medical payments limits and your personal liability limit, and evaluate a personal umbrella for an extra $1 million+ of protection; umbrellas often cost a few hundred dollars per $1 million annually, depending on risk factors (umbrella overview).
For larger scopes or where the home will be partially/fully unoccupied, ask about a builder’s risk (course‑of‑construction) policy. Homeowners policies commonly limit or exclude losses during construction; a dedicated builder’s risk solution can insure the structure and materials against perils like fire, wind, theft of building materials, and vandalism. Discuss key options and limits, including coverage for soft costs and delay‑in‑completion (DSU), materials in transit or offsite storage, and testing/commissioning of new systems; expect higher CAT‑specific deductibles (e.g., wind/hail/flood) and tighter water‑damage terms in today’s market (Triple‑I; NFIP Flood Insurance Manual; Marsh construction update; WTW construction update; Aon outlook).
Make sure your contractor is insured.
Hire only licensed, insured contractors—and verify. Require commercial general liability and workers’ compensation, confirm coverage directly with the issuing agent, and get key endorsements: additional insured status (ongoing and completed operations), primary/noncontributory wording, and waiver of subrogation where permitted. The FTC and state consumer agencies advise getting this in writing before work begins; California’s CSLB will require all licensed contractors to carry workers’ compensation by January 1, 2026. Ask for typical limits (often GL $1M per occurrence/$2M aggregate; auto $1M CSL; umbrella $1M+), verify licenses/bonds with your state board (e.g., New York guidance), and remember that certificates of insurance alone don’t change coverage—endorsements and policies control (IRMI on COIs; IRMI on Additional Insured).
The contractor should also insure their own property (tools/equipment via inland marine) and vehicles. Your homeowners policy generally won’t cover contractor‑owned gear. Clarify who provides builder’s risk for the project so that the structure and owner‑purchased materials are properly insured, including items in transit and at temporary storage (Triple‑I).
Document your home renovation project.
Create a defensible record from day one. Capture “before” conditions with photos/video (consider 360° walks), keep permits and approved plans together, and use e‑signatures for contracts, change orders, and pay applications that comply with ESIGN/UETA (ESIGN statute). Manage payment controls with a schedule of values, signed pay apps, and lien waiver tracking—use conditional waivers with each progress payment and unconditional waivers upon cleared funds to protect against mechanics’ liens. For energy upgrades, retain itemized invoices, model numbers, and manufacturer certificates to qualify for DOE Home Energy Rebates and the IRS Energy Efficient Home Improvement Credit (IRS 25C). If you capture exterior/roof progress by drone, ensure FAA Part 107 compliance (FAA) and organize documents in a common data environment aligned with ISO 19650 principles; back up files using 3‑2‑1 strategies to mitigate ransomware risk (CISA).
Keep your insurer updated as scopes evolve and at completion. Provide photos, contracts, permits, and final costs so they can re‑rate Coverage A/B and adjust Ordinance or Law limits to current codes (Triple‑I). Submit mitigation documentation to capture premium credits where available—many carriers recognize IBHS FORTIFIED roof/home designations, and California requires discounts for wildfire‑hardening measures under Safer from Wildfires. Note that DOE Home Energy Rebates are administered by states and may not be available in your state yet.
Be prepared to expand your insurance coverage.
Some projects add significant liability. Pools and hot tubs are classic “attractive nuisance” exposures—ask about raising personal liability limits and whether a personal umbrella is cost‑effective for added protection (Triple‑I umbrella). If you add detached structures or an ADU, review Coverage B limits. After upgrades, re‑estimate your replacement cost and consider Extended or Guaranteed Replacement Cost options where available (Triple‑I).
Electrification and distributed energy resources (DER) require special attention. Notify your insurer before installing solar PV, home batteries, or EV chargers—some carriers require underwriting review, permits, and proof of a qualified installer. For energy storage systems, follow 2024 code siting limits and use listed equipment (e.g., UL 9540/9540A) to reduce thermal‑runaway risk (ICC ESS resources); track recalls via the CPSC. With the 2025 transition to A2L refrigerants in new HVAC equipment, use licensed contractors trained for safe installation and code compliance (EPA AIM Act). For lithium‑ion charging (e‑bikes, tools), follow NFPA safety practices and keep charging away from sleeping/egress areas. Ask your agent about equipment breakdown endorsements, water backup, and coverage for owner‑purchased materials in transit/offsite storage; and in flood‑prone areas, remember NFIP can insure buildings “in the course of construction” (NFIP Manual).
The Bottom Line
Call your insurer before work starts, right‑size protection during construction (consider builder’s risk and address vacancy/unoccupancy), and then update limits and endorsements at completion (Triple‑I). Hire insured, licensed contractors and secure additional insured/indemnity protections (FTC; IRMI). Document the job with photos, permits, change orders, pay apps, and lien waivers, and save equipment specs to qualify for DOE rebates and tax credits. Don’t leave savings on the table—submit proof for FORTIFIED or wildfire discounts, and consider NFIP flood coverage during major renovations in flood‑exposed areas (NFIP).
