With mortgage rates elevated and the housing market evolving, many homeowners are choosing to update their current home rather than look for a new one. One aspect of this is borne out in a recent study from Nationwide, which shows that 51% of homeowners surveyed had completed a major home renovation project in the last two years. And yet, about that same amount failed to upgrade their insurance policies to protect their new investment.
Nationwide commissioned Edelman Data & Intelligence to conduct a 15-minute quantitative online survey among a sample of 1,000 adult U.S. homeowners, 400 independent insurance agents, and 131 empty nesters, identified as married or partnered U.S. homeowners aged 50 or older with a primary residence value of $500,000-$750,000, with no children living in the home and have homeowners and auto insurance, between June 24 and July 12, 2024.
Empty Nesters Spending the Most on Renovations
The share of empty nesters undertaking home renovations may be similar to that of general U.S. homeowners, but they are spending significantly more on their projects: an average of $8,670, compared to $5,128 for the typical homeowner. Empty nesters are also investing in more large-scale projects, such as kitchen remodels and full home renovations, investing double or even triple the funds that average homeowners are.
Renovation spending by project type, on average:
Kitchen remodels:
- U.S. Homeowners: $9,702
- Empty Nesters: $18,672
Full home renovations:
- U.S. Homeowners: $36,900
- Empty Nesters: $90,000
Window replacements:
- U.S. Homeowners: $4,917
- Empty Nesters: $15,375
“A complex housing market has many homeowners reconsidering plans to sell. For empty nesters, that means upgrading their current homes to meet their needs in the next life stage, rather than relocating,” said Casey Kempton, Nationwide’s President of P&C Personal Lines. “Unfortunately, our research shows that homeowners often overlook necessary policy adjustments after significant renovations, potentially leaving them underinsured in the event of a catastrophe. Every homeowner should review their home insurance coverage with their independent insurance agent regularly to avoid potential gaps.”
Homeowners Confident in Their DIY Abilities
Why are more homeowners DIY’ing it instead of hiring contractors? Three in four cite the high costs of contractors, and more than half found it difficult to find reputable contractors. While most homeowners would prefer professional help for major renovations, the survey found that 38% had taken on projects typically reserved for experts, like kitchen remodels or even home additions.
Top DIY projects among homeowners include:
- Basement renovations: 43%
- Front door replacements: 41%
- Bathroom remodels: 39%
- Kitchen remodel: 38%
- Full-home remodel/“gut” renovation: 36%
- Home addition (e.g., additional rooms, separate garage, etc.): 35%
“Although DIY can be an empowering choice, it also introduces risks that may compromise home safety and insurability. Homeowners may not realize that taking on complex projects themselves could impact their insurance,” Kempton noted. “While DIY projects might save on upfront costs, mistakes could lead to safety issues and unexpected expenses. We always recommend consulting with an insurance agent before diving into any major DIY renovation to ensure that all potential risks are covered.”
Nearly all homeowners say they relied on the internet for DIY advice, but there’s a generational split in how they research. Empty nesters are less likely to use social media for project tips, relying more on other online resources (38% of empty nesters compared to 48% of U.S. homeowners overall).
Insurance Agents as Partners in Home Projects
Unfortunately, many of these upgrades fall short on the final step: insuring the new work. Of homeowners who had completed major renovations in the past two years, over half (55%) had not adjusted their insurance policies, leaving themselves at risk of being underinsured.
One early step that could help on numerous front is including insurance agents in the planning phase. Seventy-six percent of agents surveyed said they often recommend trusted contractors to clients planning major projects. And partnering with agents early can benefit homeowners with smoother project execution and the knowledge that their insurance fully covers their upgraded home. Renewing and updating coverage helps homeowners to avoid gaps following home renovations, and unexpected financial hardships should disaster strike.
Click here for more on Nationwide’s study on home renovation projects and insurance.
