Tell your insurer about your plans

According to Don Griffin, vice president of personal lines at American Property Casualty Insurance Association, there's a good chance you're underinsured before you make any changes. Inform your insurer of your plans and clarify your policy's current coverages and limits before making any large purchases or changes to your home. If your home is more expensive to replace after you've improved it, some insurers will pay the additional cost to rebuild it, but "that's not every policy, and it may not cover everything you need," Griffin says. He also suggests that you review your home insurance policy once a year.

In some cases, switching carriers may be necessary to obtain the coverage you require. Frank Jones, an independent agent and partner at Mints Insurance Agency in Millville, New Jersey, has seen clients switch insurers due to a non-covered addition. “It is in your best interest to have these conversations now rather than having your claim denied later,” he says.

A new desk and computer for remote learning, as well as a monitor and chair in your home office, will add up and may exceed your personal property coverage limit.

Renters insurance policies protect your belongings, but they have limitations. Check with your insurer if you have new electronics or office equipment to ensure you have adequate coverage.

Make an inventory of your property

Keep track of what you buy to see if you've gone over your policy limits. Griffin recommends taking a written inventory of your belongings once a year, but even a simple smartphone video tour of your home will suffice.

Griffin describes the emotional toll of losing a home. “You don't always remember what you have” when it comes time to file a claim. An inventory will clearly show what you had prior to the disaster, making the claims process easier.

Add sufficient coverage

The most significant impact on your homeowners insurance will be structural changes, such as a full kitchen replacement or the addition of an in-ground pool. However, even something as simple as putting up a fence can affect the value of your home, and if the value of your home rises, so should the value of your dwelling coverage, according to Griffin. According to Griffin, if you don't, your insurance policy won't cover the cost of rebuilding in the event of a claim.

According to Jones, when adding coverage, consider how much it would cost to rebuild your home rather than how much you spent on upgrades. “These are two distinct numbers,” he clarifies. “If you spend $20,000 to build an addition, the insurance company will consider the rebuild construction cost, and you may not get that money back.”

Avoid pitfalls

A proactive conversation with your agent could help you avoid potential renovation pitfalls in addition to ensuring coverage. For example, he or she may recommend adding building ordinance coverage to protect you from having to pay out of pocket for any costs associated with keeping your home in compliance with local laws and regulations.

For renovation projects that are too big to take on yourself, hire a licensed and bonded contractor who carries builders risk coverage to protect expensive construction materials from theft or damage while they are on your property. A building trade association can help you find one.

And, if you're doing a home improvement project, take lots of photos — before, after, and along the way, if possible. These may be useful if you file a claim and need to redo the work.