Insurance Tips for Remodeling Your Home
When you change your home, you are changing its value by small or large amounts depending on the scope of your remodeling project. It is important to remember that your home insurance is primarily based on the value of your home. When that value changes, so will your insurance needs—and often your premiums.
Keep in mind that home insurance looks at the total replacement cost value of your home. This means how much it would cost to completely rebuild the home after a disaster, including building and material costs. If you upgrade your home with more expensive fixtures and amenities, your home’s total replacement cost value will be higher. You will need your home insurance policy adjusted to mirror that so you are not left with gaps in your policy after an accident.
You should also be careful about who and how you hire to work on your home.
Working with General Contractors
The best way to minimize your renovation risk is to hire a reputable general contractor for the job. As part of the bidding process, ask the general contractor to provide a Certificate of Insurance and/or copies of the policies. Specifically, check for coverage for the following:
Workers’ compensation: Verify that he or she has workers’ compensation coverage in the event that an employee or subcontractor gets hurt on the job.
General liability: Ask if the contractor has liability insurance, which covers losses due to negligence and errors or omission, which results in property damage. Also, ask that you are added as an “additional insured.”
Builders risk: This policy is designed to cover damage to your home and materials, including those not installed yet. We can help you verify whether you should require this from your contractor, based on your renovation project.
If they don’t carry the proper coverage, they are not the right contractor for the job.
Never be afraid to speak with your insurance agent about changes and updates to your home. An entire remodel can change your home insurance needs greatly. Failing to update your home insurance policy alongside it can cause you more money and stress in the future after a claim is denied due to a lack of coverage.
Connect with your insurance agent and adjust your home insurance policy as you see fit. Also ask about ways you can save money, such as through discounts, even after the value of your home goes up.
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