Should I tell our insurance company about a reno?

Yes, tell them. The upside of updating your policy is that your finished basement is now covered. The downside of not telling them is that if something happens, your claim could be denied. When you finish a basement, the value of your home increases because you've added livable square footage. Your homeowners insurance policy is based on what it would cost to rebuild your home if it were destroyed. If your policy doesn't reflect the finished basement, you're underinsured. If a pipe bursts and floods your new basement, or a fire damages it, the insurance company could deny or reduce the claim because the finished space wasn't included in your coverage. Your premium will go up slightly to reflect the increased replacement cost, but the alternative is paying out of pocket for damage to a space your policy doesn't know about. That's a much more expensive outcome. Call your insurance company, let them know you finished the basement, and ask them to update your coverage. It's a five-minute phone call that protects a renovation you've already invested in.

Hey Carlos! I would think you would want to update your policy to include the finished basement for replacement value!

Now that it is actual living space -- you may wish to cover the space in case of claim/damage in the future. Yes, your premium may increase. The other thing to think about is taxes -- many times it will not be taxed or taxed as equal to above ground living space if not permitted. If you finished this are for a family member with a disability -- there could be credits involved. You have definitely increased the value of your property!

I would tell them in case of a fire etc. or the damage down there wont be covered.

Brian, It is human nature that we want to keep our costs down, but insurance companies have become skilled at finding ways to not pay out claims. I feel that the marginal increase in premiums is not worth the risk to the remainder of my asset to not notifying them about an increase in living area in your home.

I would recommend letting you Insurance carrier know. The benefits is you have updated your policy to include your renovation and extra sq ft of finished area . Your down side may be a small insurance price increase due to the nice renovation. I feel the it beneficial for you to update .

I would recommend letting your insurance company know of the updates so they can adjust your insured value in case something happened in your basement that you needed to file a claim.

Illinois may have different laws, but in california, If it adds value, I would definitely let the insurance company know. Especially if you would like the insurance to repair it.