Insuring a home undergoing remodeling is one of the best ways of protecting your remodeling budget. Adequate insurance will protect the additional installations and the materials; it will even shield you from any mistakes the workers may make. Take these three precautions to ensure you are adequately protected:
Inform Your Agent and See If You Need Additional Coverage
Remodeling almost always increases the value of a home. For example, installing a new kitchen or upgrading the basement into an additional living space increases your home's value. Your insurer also experiences an increased risk since they have to spend more money to replace the remodeled parts of the house in case of damage.
Therefore, you need to inform your insurer or insurance agent, preferably before commencing the remodeling project. Your insurer needs the information to ensure that your insurance coverage extends to the improvements. You may need to buy additional coverage if your existing one falls short. Don't make the mistake of waiting until after the project's completion. If you do that, you might not be covered if something happens to the house during the remodeling.
Confirm That Your Contractor Has Adequate Insurance
Most people hire contractors to manage their remodeling projects. The main contractor may also hire subcontractors to handle portions of the work. If that's the case, confirm that the contractor, subcontractor, and their employees are insured in case they get injured on the job. If they don't, you will be responsible if any of them gets injured on the job, and this can lead to an expensive lawsuit.
Most states have licensing boards that deal with these issues; they also tend to have websites where you can confirm that a contractor is insured. Confirm that your contractor and their subcontractors are adequately insured before the project begins.
Evaluate Your Need for a Builders Risk Policy
A builder's risk policy protects your interest if thieves strike and get away with your building materials and equipment during the remodeling project. With this policy in place, you won't need to pay for new plumbing pipes, electrical wiring or roofing lumber if they are stolen. Either you or the contractor can purchase this policy. Therefore, talk to the contractor to check if your agreement covers it or you need to buy it.
Are you planning a remodeling project soon? If you haven't factored in the insurance costs in your remodeling budget, stop your plans until you can talk to an insurance agent like those found at Willie Swims Ins Agency, Inc.