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Selective Research Finds Value-Boosting Home Renovations Up 25% Between December 2020 and July 2021

With the exploding real estate market and home renovation boom, homes may now out-value their insurance valuations, putting homeowners at risk of being underinsured.

Selective and The Harris Poll found that home renovations have increased 25% December 2020 and July 2021, with over half (55%) of US homeowners reporting that they made home improvements that boosted the value of their home. Compared to the 44% of homeowners reporting improvements in December 2020, it's clear that home improvements are on the rise, despite supply chain delays and pandemic restrictions.

Home Improvements Are Driving Need for Updated Homeowner Insurance Policies

The Selective study found that home renovation activity in the South, Midwest, and West has caught up to the activity that the Northeast experienced in December 2020.

The South now leads the nation in value-boosting home renovation activity with 57% of homeowners in that region making significant improvements, such as adding pools or hot tubs, renovating a basement or attic, or adding a new room.

Those making home improvements in each region include:

  • Northeast 54% in July 2021 vs. 56% in December 2020
  • South 57% in July 2021 vs. 40% in December 2020
  • Midwest 52% in July 2021 vs. 42% in December 2020
  • West 55% in July 2021 vs. 43% in December 2020

Here’s how U.S. homeowners invested in their homes since the beginning of the pandemic:

  • 36% are renovating a room/basement/attic in July 2021 vs. 31% in December 2020
  • 12% are adding a new room in July 2021 vs. 7% in December 2020
  • 17% are adding a pool/hot tub in July 2021 vs. 11% in December 2020

Among those homeowners who improved their homes since the beginning of the pandemic, a majority (July 2021 66%) (Dec 2020 60%) updated their homeowners coverage.

  • 23% (Dec 2020 27%) said that they hadn’t updated their coverage
  • 10% (Dec 2020 9%) said that they are not sure about this

Significant differences for updating homeowners insurance coverage after home improvements:

  • Those who are college graduates (July 2021 73%) (Dec 2020 72%) were significantly more likely to update their home insurance coverage than those who have less education (July 2021 60%- high school or less and 58%-some college) (Dec 2020 49%- high school or less and 59%-some college)
  • Male vs. female (July 2021 71% vs 60%) (Dec 2020 70% vs. 52%)
  • Employed significantly more than not employed (July 2021 71% vs 55%) (Dec 2020 71% vs. 41%)
  • With children in household than those without (July 2021 74% vs 56%) (Dec 2020 73% vs. 50%)
  • Parent vs. non parents (July 2021 76% vs 55%)(Dec 2020 75% vs. 49%)
Updating your homeowners insurance after renovating your house, Selective Insurance and Harris Poll Home Renovation Research

After Improving Your Home, Update Your Homeowners Insurance

“The years 2020 and 2021 saw the beginning of a marked boom in home improvement spending, as homebound Americans turned their attention to enhancing their residences.”

Selective's insured contractors reported a 15% increase in subcontracting costs year over year from 2019 through 2021 - indicating continued home improvement activity.

Selective Contracting Customers Confirm Home Renovation Uptick

An analysis of Selective's issued policy data saw a 5-10% increase in residential construction payroll.

“

Major home renovations can directly impact the overall value of a home which is why it is critical for homeowners to update their homeowner’s insurance policy after home improvements to help protect against underinsurance in the unfortunate event of a loss.

Shelly Gallagher, Vice President, Personal Lines

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Additional Information

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1The Harris Poll, on behalf of Selective Insurance Company of America, conducted online surveys within the United States from December 28-30, 2020 and July 6-8, 2021, by polling 2,057 U.S. adults aged 18+. Results were weighted for demographics where necessary to align respondents with their actual proportions in the population. Propensity score weighting also was used to adjust for respondents’ propensity to be online. This online survey is not based on a probability sample, and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including subgroup sample sizes, please contact [email protected].