In the upcoming year, home improvement activity is expected to rise. For those who
plan to be a part of this rising number, it is important to have the right type
of insurance and the right amount of coverage. Insurance should be in place
during and after construction. Anyone considering a remodeling project should
contact an agent before the process begins. Many people must alter their
coverage or add more. Waiting until the project starts or is finished can be an
expensive mistake, so take the following four important steps to avoid an
1. Discuss home improvement plans with an agent. Ask about updating a
homeowner’s policy, and ask whether or not other types of insurance will be
needed for protection during the construction process. Only those who are
qualified to perform DIY projects should attempt them. People who are not
construction workers should not help unless there is sufficient liability
coverage for their protection. Many homeowners must raise their no-fault
medical protection limit for such workers. For a larger project, it is best to
consider a course of construction policy. This covers the home during the
building process from weather or theft damages.
2. Make sure the contractor is covered. Before allowing a contractor to start
work, ask to see his or her insurance policies. Contractors should carry both
workers compensation and commercial general liability insurance. If one of the
insured contractor’s workers sustains injuries, that individual will not be
able to sue the homeowner. Contractors who are unwilling to provide insurance
documents should never be hired.
3. Store all receipts and records. Be sure to take photographs before, during
and after the remodeling project. This provides a virtual record of what the
property looked like during each phase. Hold on to all contracts from
contractors, and be sure to save the receipts for all materials purchased. Keep
receipts for any other belongings bought for the home during the project.
4. Update insurance policies after the project. Let an agent know
when any home improvements are made. Insurance amounts may need to be increased
following a major renovation. All of the records and receipts may need to be
copied and sent to the insurance company. This helps them assess needs and assign
accurate values for the improvements. An agent will be able to recommend a
floater or endorsement for more expensive items. More liability coverage may be
needed if a pool or spa was added. An umbrella policy may be the right solution
for this situation.
Be sure to ask an agent about discounts. When people install burglar/fire alarms or
interior sprinklers may qualify for discounts. People who update their
plumbing, electricity, roof or windows may also qualify for discounts. This is
especially true if any energy-saving features were installed.
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