Insuring my Home During a Renovation
As the weather starts to improve, many homeowners start planning major remodeling or renovation projects.
Some people hire a general contractor to manage the renovation process while others prefer to manage the project themselves.
Some homeowners are willing to make it a DIY project and actually do some tasks while hiring licensed subcontractors for plumbing and electrical work.
However you choose to remodel, keep this in mind: The homeowner, the general contractor and the subcontractors need insurance coverage.
Contact your home insurance carrier or broker to confirm whether your policy covers your home and property while it’s being remodeled. For example, if you have to move your furniture out of the rooms that are undergoing renovations, consider getting a storage container to put in your driveway.
Your homeowners policy should cover the contents in the container, but confirm the coverage with your broker. If you don’t have room for a container on site and you put your belongings in an offsite storage unit, you may need a separate policy.
After you’ve selected a general contractor (GC), make sure that the they are licensed and have a surety bond. If the GC can’t finish the job for some reason , for example, illness or bankruptcy would be covered by a surety bond.
The GC is responsible for property damage, injuries on the job site and negligence in workmanship, which should be covered by the GC’s general liability and worker’s compensation insurance. Ask to see the certificates and check that the coverage will be in effect the entire time that work is being done.Determine adequacy of policy limits.
Adequate insurance coverage includes the limits of the policy, not only whether there is a policy in place. General liability limits vary, but most general contractors carry a $1 million limit. Depending on where you’re located, and the size of the project, this amount may not be enough.
As the homeowner you should review your policy limits as well. Are the limits for bodily injury and property damage high enough to cover the risks from your remodeling project? Do you need an umbrella policy?
Completed operations coverage provides insurance for things that can go wrong after a job is done. For example, in a second floor addition, the plumber installs a bathroom without insulating pipes. When the pipes freeze the next winter, that same contractor has to open walls, repair frozen, burst pipes, add insulation, and repair/repaint the walls.
Consult your broker.
There are so many variables to insurance coverage for home remodeling projects, some mandated by state law, that you and the GC should consult your brokers before starting the project.
As the homeowner, remember to speak with your insurer about increased coverage for the value of your property after it’s been remodeled. A two-story colonial is worth much more than a single-story ranch-style house.
If you have any questions, please give us a call at 480-535-5709. Thank you!
AZ Insurance Team 480-535-5709 https://www.azinsuranceteam.com
*All policies are a little different and this may not be applicable to your insurance policy, talk to your agent to see what your policy covers.*