When policyholders renovate their homes, they boost the property's value. By not updating their policy, homeowners could find their current coverage inadequate should they suffer a major loss event. The Hanover noted that when a renovation occurs, it often requires an update to the "Coverage A" amount listed on a policy. (Credit: A_stockphoto/Shutterstock.com)
During the coming year, 61% of U.S. home insurance policyholders are planning renovations, but 34% of those undertaking projects said they don't plan to or didn't think they needed to tell their home insurance company about the projects, according to a survey by The Hanover.
This past year fewer homeowners (26%) said they didn't know they should contact their insurance agent when making home renovations. The Hanover noted independent agents should regularly inform policyholders of when they should contact them to update a policy.
"Proactive outreach throughout the year also results in powerful conversations that give customers peace of mind that their agents are continuously looking for ways to protect investments and add value to the relationship," The Hanover noted in its report.
Further, when policyholders renovate their homes, they boost the property's value. By not updating their policy, homeowners could find their current coverage inadequate should they suffer a major loss event. The Hanover noted that when a renovation occurs, it often requires an update to the "Coverage A" amount listed on a policy.
A quarter of homeowners with renovation plans said they are undertaking major projects, according to the insurance company. Around 40% of homeowners with renovation plans said they'll spend more than $50,000.
What's driving renovation uptick?
Surging home prices and higher interest rates slowed home purchases, according to The Hanover, which reported 28% of people that sought to purchase a home in 2022 had to stay in their current living arrangement longer than expected. Nearly 70% of those looking to buy a home said interest rates and higher prices affected them.
Millennials were most impacted by housing market trends, according to The Hanover, which noted the cohort is also more likely to make renovations in the coming 12 months.
Richard W. Lavey, president of Hanover Agency Markets at The Hanover, said in a release: "These trends should prompt agents to talk with their customers to ensure their homeowners' policies reflect the true value of their home after a renovation, and that their policies protect the investments they have made to their home. These conversations can help create a strong customer experience that reminds customers of the value their agent provides."
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