You may be looking for ways to improve your home. Perhaps you want to upgrade
your heating system or replace a leaky roof. Or add on that sunroom you’ve
always wanted. Before you get started, however, you'll want to know how that
remodeling project can affect your insurance needs.
Update your homeowners insurance
Whether you're updating your kitchen or adding on another room, a remodeling
project will likely add value to your home. As a result, you'll want to check
the property coverage limits on your homeowners policy to make sure that they
reflect any changes you make to your home, no matter how small or large the
improvements may be.
And if you're adding on to your house, you'll want the addition specifically
mentioned in your policy. If it's not, your insurance company may not provide
coverage for damages that occur to the new room.
If you hire someone to do the remodeling . . .
If you hire someone to do the remodeling, you'll want to make sure that he
or she is properly insured. Any contractor that you hire should have a certificate
of coverage for both workers' compensation and contractor's liability insurance.
Workers' compensation coverage protects you from liability claims that can
result from a contractor (or his or her employees) getting hurt on the job.
Contractor's liability insurance provides coverage for damages to your property
caused by the contractor during remodeling.
If you hire a general contractor who is planning on handing off some of the
work to a subcontractor (or if you plan on acting as a general contractor yourself),
you'll also want to get a copy of the subcontractor's proof of insurance.
For the do-it-yourself remodeling project . . .
Before jumping into a home improvement project, make sure that you're prepared
in case an accident occurs. If someone helping you on a remodeling project is
hurt, his or her injuries will be covered under the liability portion of your
homeowners policy. You may also want to look into a personal umbrella liability
policy, which provides coverage above and beyond your regular homeowners insurance
and is especially important if you have significant assets that you need to
protect.
Other tips
- Some additional remodeling tips:
- Before you get started, make sure that your remodeling project meets local
building codes--otherwise, damages may not be covered by insurance
- Check with your local Better Business Bureau to find out if any complaints
have been filed against any contractor you are hiring, and ask to see the
contractor's license
- Get copies of the contractor's insurance coverage--have the insurance agency
or company send the certificate directly to you
- Check your homeowners policy (or your contractor's insurance policy) to
make sure that building materials and other uninstalled items (e.g., carpet,
tile, cabinets) stored on your property are covered against theft and vandalism
- Keep your insurance agent up-to-date about any improvements to your home--he
or she can help make sure that you are adequately covered at all times
Please note that this description/explanation is intended only
as a guideline.