Having the correct insurance coverage is an often-overlooked aspect of starting a home improvement project. Building an addition or making renovations may leave you without adequate insurance coverage or could expose you to unexpected liabilities. Before you start your project, take a moment and consult with your personal insurance professional.
Homeowners Insurance Adjustments
Depending on the size and scope of your remodel, your insurance professional may recommend changing some of the limits on your homeowners’ insurance policy. For example, it may be a good idea to increase the building and liability protection on your home during the course of the project. Additionally, if you are furnishing the new area with anything of significant value, such as antiques or fine arts, it may be worthwhile to consider adding or increasing your valuable article insurance.
Your Contractor’s Insurance
After reviewing your own insurance coverage, it is also important to check the insurance of your contractor or home remodeling company. Ensuring the general contractor has the proper insurance is very important. By hiring an improperly insured contractor, you can be vulnerable to a lawsuit should someone be injured during your remodel.
The amount of liability insurance your contractor needs will vary. It is dependent on a number of factors including amount and type of work being completed. You will want to ensure the contractor has at least general liability and workers comp insurance.
If the general contractor is planning to use any subcontractors during the project, you will need to check the coverage of those subcontractors. If an employee of the subcontractor is not a full-time employee and is injured, he may not be covered by anyone’s workers compensation insurance.
General Contracting Yourself
If you are planning to act as your own general contractor, be sure to mention this to your insurance person. Depending on your state, acting as a general contractor on a home improvement project could subject you to additional liabilities. If you do act as a general contractor, you may want to consider purchasing a builder’s risk policy for the duration of the project.