There are so many things you have to keep in mind when remodeling your home. One that’s often overlooked is the numerous ways that a home renovation could impact your insurance policy. So while you’ve already got a lot on your plate, you’re going to want to stop and think about these six insurance tips before you get too far into your project.
Speak with your insurance company
When remodeling, you should notify your insurance company about the changes to your home, especially if they’re going to be large ones. Since remodels add value to your home, they’re also likely to raise your insurance premiums so you’re obligated to let the insurance company know. If your remodel includes big ticket items like new kitchen appliances, you should update your insurance coverage by adding these to your list of belongings in the home so that they’re covered if the worst should happen.
Make sure contractors are licensed and insured
There’s a lot that can go wrong during a remodel so it’s crucial that any contractors, and especially a general contractor, are licensed and insured. If there is damage to your property due to shoddy remodeling work and it turns out the contractor you hired isn’t insured, your insurance company may not be willing to pay out. Even if the contractors are licensed, they should also be insured just in case.
Ensure subcontractors are covered as well
Often, general contractors will need to bring in subcontractors such as electricians and plumbers to do specialty work that the general contractor’s guys can’t do. These subcontractors don’t work for your general contractor and won’t be covered by his/her insurance so you need to make sure they have their own coverage. A good general contractor should only be working with licensed and insured subcontractors anyways but it doesn’t hurt to make sure.
Purchase builder’s risk insurance
Homeowner’s insurance and the contractors insurance coverage protect your property during a remodel but they usually don’t cover building materials and equipment that belong to the contractor or subcontractors. Builder’s risk insurance ensures coverage for those materials and equipment in case they’re stolen or damaged somehow from the work site or while being transported to the work area.
Ask about completed operations insurance
Completed operations insurance protects your home and property after the remodel is complete. If your garage door was installed improperly, for instance, but it comes crashing down on your car after the contractors have already finished and moved on, completed operations insurance would still cover the damage.
Be on the lookout for hazards
It might be a good idea to bring in an insurance inspector before a remodel even begins to consider how you might make your home safer. This could even lower your insurance premiums. For instance, in older homes that have baseboard heaters, there is a fire hazard if there’s not enough circulation around them. Young children can lodge items beneath them and that poses a risk. Installing baseboard radiator covers ensures proper ventilation and may reduce the risk of a fire.
Source: Tri County Sentry