LOS ANGELES, September 22 — Mercury Insurance has a message for homeowners staring down a major remodel: talk to your insurer before the first hammer swings, not after the last coat of paint dries. The Los Angeles-based insurer issued a consumer guidance release on Tuesday titled “Before You Renovate, Put Insurance on the Project Checklist,” arguing that a conversation about homeowners coverage belongs in the earliest stages of project planning.
Major renovations, the company notes, can change a home’s physical characteristics, its replacement cost or its liability exposure — which means a policy written for the old house may no longer fit the new one.
A $518 billion wave of home improvement
To frame the scale of what’s at stake, Mercury cited a Harvard Joint Center for Housing Studies projection that annual spending on homeowner improvements and maintenance will reach approximately $518 billion by the end of 2026. Adam Bakonis, Director of Homeowner Product Management at Mercury Insurance, said homeowners devote enormous time to choosing contractors, finishes and materials — but that insurance belongs on that planning checklist too. A major renovation, he added, can change the physical characteristics, replacement cost or even the way a home is used.
Talking with an insurance agent before the project begins and again after it is completed, he said, can help make sure the policy continues to reflect the home the homeowner actually has.
Six checkpoints, from contract to completion
The release lays out six insurance checkpoints across the life of a renovation. Before signing the contract, homeowners should talk with an insurance agent about the scope of the project — particularly if it involves adding square footage, structural changes, high-value materials or new features such as a pool, spa or accessory dwelling unit.
Before construction begins, the guidance says to confirm that contractors are properly licensed where required and carry appropriate insurance, ask for proof of applicable liability and workers’ compensation coverage, and find out whether subcontractors will be used. A contractor’s insurance and a homeowners policy, Mercury notes, serve different purposes.
When the project changes, homeowners should pick up the phone. Renovations do not always follow the original plan — a kitchen update can become a larger remodel, an unfinished area can become living space, an outdoor project can expand significantly — and Mercury advises updating the insurance agent rather than waiting for the work to end. Higher-end materials matter too.
Custom cabinetry, upgraded flooring, built-in appliances and premium fixtures can affect what it would cost to repair or rebuild the home after a covered loss, making replacement cost an important part of the insurance conversation. Mercury is explicit that the implications are not necessarily about resale value.
New features and systems bring their own considerations. Pools and spas can introduce additional liability exposure, while additions and ADUs can change a home’s size and use. New roofs, electrical systems, plumbing, HVAC equipment, solar panels and battery storage can also change property characteristics an insurer may need to know about.
Certain qualifying upgrades, protective devices or mitigation improvements may be eligible for discounts, depending on the home, the state, the product and applicable underwriting requirements. And when the work is finished, the guidance says to let the insurance agent know the project is complete and provide any requested documentation, review the home’s replacement cost estimate, update the home inventory, and keep photographs, receipts, permits and other records associated with the renovation. Homeowners should also ask whether completed improvements may qualify for available discounts and whether liability limits remain appropriate.
Keeping pace with the house
Bakonis said the insurance conversation should not be thought of as something that happens only after the renovation is finished, and that the best time to ask questions is before the work begins — especially when adding square footage, making structural changes or introducing new features that may affect replacement cost or liability. Mercury framed the goal simply. It is not to predict whether a renovation will make insurance more or less expensive, but to make sure the policy keeps pace with the house.
A newly remodeled kitchen, an expanded living area or an upgraded backyard may look very different from what was there when the policy was originally written. For homeowners planning work in the months ahead, the practical takeaway is a calendar note: call the agent before the contract is signed, and call again when the dust settles.
