Homeowner's Insurance During a Remodeling
By Kristi Vaughan
As you start that long-awaited remodeling project, don't forget to protect your investment with adequate insurance. There are two critical insurance considerations during a remodeling: the time while the remodeling is underway and the increased value of your house after the remodeling has been completed.
During the remodeling
Insurance agents and professional organizations such as the Insurance Information Institute and the Independent Insurance Agents Association, recommend that you review your homeowner's insurance before construction starts. Are you required to raise your limits before construction starts to cover the value of the addition? If you move out of the property for a period of time what effect does that have on your insurance? And what about the belongings you'll bring with you? You also should "talk insurance" with contractors who have responsibility for the project. Ask to see contractors' policies and verify coverage with the insurance company. If you are acting as your own general contractor, make sure to get insurance information from each subcontractor.
Workers' compensation
If you have hired a general contractor, ask to see a copy of that contractor's insurance coverage. Does he have worker's compensation to pay for medical injuries should one of his employees get hurt on the job? Does the worker's compensation extend to subcontractors?
General liability
Does the contractor have liability insurance? Such insurance should cover potential acts of negligence or omission that could cause property damage or injury.
Builders risk
Ask your agent whether your general contractor also needs a builder's risk policy. This type of policy can cover damage to the home and materials including those that have not yet been installed.
When the project is done
One the renovations have been completed, the value of your home might be greater than it was previously. An insurance agent can help you determine how the renovations have affected the value of your house and whether you need to increase the limits on your policy. This also can be a good time to review related insurance policies including umbrella and supplemental policies for valuable items.
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