In addition to checking with your insurance agent, any contractors, subcontractors you use must be insured, licensed, and bonded
Renovating your home can be an exciting process, but there a ton of things can go wrong— many of them incredibly expensive. From faulty construction methods, to theft of work materials, use of unlicensed contractors, and accidental building against code for fires and other disasters; both unintentional errors and intentional misdeeds can leave your home a wreck and your finances significantly depleted.
To safeguard against these threats, you need to make sure your home, family, and finances are protected from the worst during the renovation and remodeling process– and the best way to start is to consult your insurance agent. From there, it’s essential that you do your own research to vet (and insure) every part of the remodeling process– as well as any contractors, subcontractors, or others whom you’ll work with on the project. Here’s how to do just that.
Insurance is needed whether self-renovating or hiring the services of a general contractor
Whether you hire a general contractor or decide to do much of the project yourself, directly hiring experts like plumbers and electricians, you’ll need to have comprehensive insurance coverage in order to protect yourself. However, it’s also important to make sure that any plumbers, electricians, or other specialized workers you use are fully insured. If you do want to do all or part of the project yourself, it’s essential to check your homeowner’s insurance policy first. Some self-renovations may void your policy, potentially leading to serious problems in the case of an unexpected expense or accident.
In addition, those considering remodeling will want to review their homeowner’s insurance policy in order to determine your policy’s rules about home renovations. For example, if you move furniture and other possessions from your home and into a storage container, you’ll need to check whether your possessions are still insured. If they aren’t, you’ll likely want to purchase a supplemental policy to protect against any damage that may occur to the container and its contents during the remodeling process. In addition, it’s important to realize that insurance rules may differ for homeowner’s using a mobile storage container on their property vs. those using a mobile or building storage unit located off site.
General contractors don’t just need insurance; they also need to be bonded and licensed
If you use a general contractor (GC) to organize your home’s renovation process, they’ll need to have more than just insurance to keep you safe. Making sure your GC has a surety bond is of utmost importance. It ensures that any losses you face due to a GC’s inability to finish a job (i.e. because of illness or bankruptcy) will be covered. Without a surety bond, a GC could go out of business and leave you ‘holding the bag’ with a half-completed house and no more money to spend on finishing the job.
In addition to bonding, you’ll want to make sure that your contractor’s insurance policy covers any accidental injuries to themselves or others that occur on your property because of the contractor’s work, supplies, or equipment. It’s also a good idea to make sure your contractor’s tools and equipment are insured, as you don’t want to be footing the bill for lost, stolen, or misplaced equipment. You may want to make sure the contractor’s vehicles are insured, and you might also want to specifically insure the renovations themselves through a builder’s risk policy, depending on your specific situation and the scope of the renovation job.
Consulting your insurance agent before renovation can help prevent costly mistakes
With so much that can go wrong during home renovations, when it comes to remodeling, it’s better to be over-insured than underinsured. Proper insurance, as well as bonding and licensing, can help you recover from a variety of disasters including accidents, fires, illnesses, fraud, and lost or stolen equipment. Without it, you and your family could be literally ‘left out in the cold’ with a half-finished house and empty bank accounts.
To learn more about how a variety of insurance policies that can help protect you and your family from the risks of a renovation gone bad, contact Avante Insurance today for a free consultation.