The Risks of Renovating a House in Omaha
Your home is likely your biggest investment, and that new deck, finished basement, or dream kitchen will add significant value. However, many Omaha homeowners don’t realize the hidden risks of renovating a house. These improvements can create insurance gaps that could cost thousands if something goes wrong during construction. Understanding the risks of renovating a house in Omaha and how remodeling affects your homeowners insurance will protect your investment from day one.
Before you sign that contractor agreement, here’s what you should know about keeping your home properly covered. As experienced insurance agents, the team at Eric Luebbe Insurance can help explain it all.
How Renovations Change Your Home’s Replacement Cost
When you add a deck, finish your basement, or install a high-end kitchen, you’re increasing your home’s total value. Your dwelling coverage, the part of your homeowners policy that pays to rebuild your house, must reflect these improvements.
A $40,000 kitchen remodel with custom cabinets and granite countertops raises your home’s replacement cost by that amount. If your policy still shows the pre-renovation value and a fire destroys your home, you’ll face a significant shortfall. The same applies to finished basements with new electrical, plumbing, and living space, or composite decks with built-in lighting and railings.
Insurance companies calculate replacement cost based on square footage, materials, and features. Adding 400 square feet of finished basement space or a 300-square-foot deck changes that calculation. Also, high-value materials cost more to replace, which means your coverage limits need adjustment to match your home’s new worth.
Coverage Gaps During the Construction Phase
Standard homeowners’ policies weren’t designed to cover active construction projects. This creates several risks of renovating a house that catch people off guard:
- Construction-Related Damage: Your policy may exclude damage caused by the renovation work itself. If a contractor accidentally damages your plumbing while finishing the basement, your standard coverage might not apply.
- Weather Exposure: Omaha’s severe storms pose real threats to mid-renovation homes. An exposed basement during finishing work or a partially completed deck can suffer hail or wind damage that falls outside your policy’s protection.
- Theft and Vandalism: Construction sites attract thieves. Expensive materials, tools, and equipment left on-site create new liability exposures your current policy may not adequately cover.
- Contractor Injuries: If a worker gets hurt on your property and lacks proper workers’ compensation coverage, you could face a lawsuit that exceeds your liability limits.
Essential Steps to Protect Your Property During Renovations
Contact your insurance agent in Omaha to talk about how remodeling will affect your insurance costs before starting work. Discuss your project details and ask whether you need temporary coverage enhancements. Some renovations require builder’s risk insurance, which specifically covers properties under construction.
Verify your contractor’s insurance coverage. Require proof of general liability insurance with minimum limits of $1 million per occurrence and $2 million aggregate. Also, confirm they carry workers’ compensation coverage for all employees, because uninsured contractor problems become your insurance problems.
It’s also important that you document everything with detailed photos. Take pictures before, during, and after construction. Keep receipts for all materials and labor. This documentation supports both claims during construction and coverage limit adjustments after completion.
Consider these temporary coverage options:
- Builder’s risk insurance: Covers the structure and materials during major renovations like basement finishing or room additions
- Increased liability limits: Protects you if someone gets injured on your construction site
- Equipment and materials coverage: Covers theft or damage to construction materials stored on your property
- Sewer backup coverage: Essential for finished basements in Omaha, where storm drainage can overwhelm systems
Update your policy immediately after completion. Schedule a post-renovation review with your agent and provide final receipts and documentation showing the increased home value. Adjust your dwelling coverage to reflect the improvements; don’t wait until your annual renewal.
Get Your Coverage Right Before Breaking Ground
Smart renovations start with smart insurance planning. That finished basement, new deck, or custom kitchen deserves protection from the moment construction begins. Don’t let coverage gaps turn your dream home improvement into a financial nightmare. Make sure you are aware of the risks of renovating your house in Omaha before you start your project.
Contact Eric Luebbe Insurance Agency for a complimentary pre-renovation insurance review. We’ll identify coverage needs, recommend appropriate limits, and ensure your Omaha home stays protected throughout your remodeling project. Making the switch to proper coverage is easy with a team that takes pride in fighting for your best interests.
