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How Changes in Your Home Affect Your Home Insurance

Your home is not just a residence-it’s an investment that can make you a profit in several different ways. By selling your home at a higher price than you paid for it or by repurposing your home into a money-making building, you could turn your home into cash. But if you make these changes without getting a proper home insurance quote, you could be in for trouble.

The Issues of Working at Home

One of the results of this downturn has been a dramatic increase in the level of unemployment and underemployment with many more people finding their hours cut or completely nonexistent. But what can you do? The bills still need to be paid so the obvious answer for some is to start running some kind of business from home. Even if your efforts only produce a few dollars of profit a week, that’s a few dollars more than you would have had if you had not taken the risk.

The problem with this scenario is that turning your home into a place of business changes part of your home from residential use to commercial use and depending on the type of business you decide to run from home, this could increase the risk of an insurable incident which could negatively affect your home insurance quote or policy. For instance, if you turn your kitchen into a catering operation to sell cakes and cookies you could increase the risk of fire. If you have clients coming to your home, there is a greater risk of someone being injured by slipping on your floor tiles or tripping over a loose carpet. In both of these instances, because the claim stemmed from an undisclosed usage of your home, your insurance company may deny it. When getting home insurance quote or working with an existing policy, be sure to always tell your insurance company if you are going to change the use of your home. If you do not, the insurer could refuse to pay out on any claims.

Renting Your Home

Another possible way of raising money is to convert a part of your home into a self-contained apartment and renting it out. That rental income could make a big difference when it comes to paying those monthly bills that have piling up but your home insurance quote or policy may not cover claims that result from renter’s negligence. So that extra money from rental fees could be spent repairing various damages that the renter could cause.

Home Renovations

If your home is beginning to feel cramped but you don’t have the equity or credit to buy a new home you might decide to add-on to the structure or renovate the existing rooms. These changes increase the value of your home and may exceed the limits you chose for your home insurance quote or policy. In order to make sure you can be made whole after an insurable incident in your home, you must tell your insurer about the proposed increase in value and whether any changes in the materials used will affect the risk.

So no matter what kind of changes you plan to make in your home in order to help your family through this current economic crisis, be sure to factor those changes into any online home insurance quote you receive or existing policy you already have.




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