Homeowners Insurance – Renovating your Home or Planning To Renovate?
If you are renovating you are planning to renovate your home, call your insurance company first.
Find out if you have the Insurance Coverage you Should Have.
If you are renovating or planning to renovate your home, you should make several inquiries into your current insurance coverage’s. Your first inquiry should be to your broker, agent and/or your homeowner’s insurance company as to how they want to handle your coverage, if at all, while your home is being renovated. Your second inquiry should be to the broker, agent or insurance company of your general contractor to make sure that he has general liability and workers compensation coverage.
Find out if you are covered if something happens to your home while under construction.
Typically homeowner’s insurance companies are not comfortable with covering homes while under renovation. If you take the ignorance route and do not call your broker, agent or insurance company and there is a loss while your home is under renovation your current coverage may be in jeopardy. The insurance company can deny coverage under a homeowner’s policy because there has been a material change in exposure. The insurance company originally signed up to insure a home not to insure a home under renovation. Here is a fact that will certainly encourage you to properly insure your home while under renovation, “Between 2002 and 2005, property losses from fires in one- and two- family homes during construction or major renovation increased 42%, to $199 million from $140 million, partly because of rising costs for materials and labor. The average loss per house was $53,500 far higher than for occupied homes, according to the nonprofit National Fire Protection Association.
How to be properly covered for your home renovation.
The solution: Considering buying a builders risk insurance policy. A builder’s risk insurance policy, although a property only policy, addresses the aforementioned issues and is designed to protect a home or building while under renovation or construction. Make sure your general contractor is named as an additional insured on your builders risk policy. A builders risk policy must be insured for 100% of the homes completed value. If it is not insured for 100% of its value and depending how underinsured your home is you may have to pay money a lot of money out of your pocket in the event of a loss.
Make sure YOU are properly covered.
Also, make sure YOU are named as an additional insured on your general contractor’s general liability policy. A separate general liability policy can and should also be purchased by you to protect you against anyone other than a contractor or laborer getting injured on your premises.
Be involved in the insurance coverage to insure it is correct.
Do not leave the purchase of the builders risk policy to the contractor. Make sure that you as the homeowner purchase the builders risk policy. If there is a loss and you left the responsibility of buying the builders risk policy to the contractor and he/she forgets to get buy it or didn’t pay the bill, you don’t want to get into a finger pointing and blaming match in addition to having no coverage.
