Whether you’re updating a design you’ve always disliked or adding a feature you’ve been wanting for years, undergoing a home renovation can be exciting. But did you know that it can also affect your homeowners insurance rate? Before you proceed with any project, you’ll want to consider these points.

Premium-raising projects

Major renovations may increase your insurance premiums because they typically raise the value of your home, necessitating more coverage. Think projects like building an extension onto your home, converting an unfinished basement into a recreation room, or completing an extensive kitchen remodel. In most cases, though, you shouldn’t let the risk of higher premiums dissuade you from making updates you can otherwise afford since they can significantly increase your enjoyment of your home. Additionally, the increase in your home’s value may be worth it in the long run—when you’re ready to move, you may be able to sell it for a significantly higher price.

Other projects that may raise your premium are those that introduce new liability risks, which may increase the likelihood you’ll file a claim. Projects like adding a fireplace boosts the odds of a house fire, just as installing a swimming pool or hot tub in your backyard presents a hazard, especially for young kids. However, adding a pool, hot tub, or fireplace may raise your home’s value as homebuyers may view them as desirable amenities.

Cost-saving upgrades

Not all renovations will add to your insurance bill. Ones that make your home safer can actually lower your premiums because they may reduce the possibility you’ll file a claim. Among such projects are upgrading an aging electrical system, installing a security system to help avoid break-ins, and putting in a new roof, which can not only protect your home from the elements but also possibly increase its energy efficiency.

Before you renovate

Since home renovations can potentially impact your insurance coverage, it’s in your best interest to inform your insurer of any planned upgrades. They can work with you to help make sure your insurance coverage can adequately protect you and your home. Before your project begins, let them know about the type of work that’s to be completed, its estimated timeline, and the cost of it. They should be able to tell you what additional coverage or insurance, such as personal liability, you can potentially expect to need as a result.

Basic or DIY updates, such as painting a room or pasting some wallpaper, shouldn’t affect your premiums, so you won’t need to contact your insurer for those. But for larger projects, make it a point to keep in touch, and be sure to hold onto all your receipts. Your insurer may need to review them to accurately assess your insurance needs once your renovation is completed.

If you’re not sure how a project may affect your coverage, contact your insurance agent before getting it started. Failing to keep them informed may leave you underinsured—at great financial risk and potential cost to you.