Insuring home improvement success
When you're planning to spend thousands of dollars on home improvements,
the last thing you want is for your investment to go down the drain. For that
reason, it's crucial to make sure you've taken all the necessary steps to insure
your project before you begin.
|Steps to take:|
one: Contact your insurer
Major renovations can leave your home exposed,
physically and financially. Those new French
doors could be stolen before they are installed.
Major roof work might leave your home exposed
to the elements, some of which might not be
covered under a regular homeowners policy.
In such cases, adjust insurance
coverage temporarily. "During construction,
there may be some kind of insurance rider
just in case there's an accident or something
that protects you in addition to your insurance
coverage," says David Lupberger, a home
improvement expert for ServiceMagic, a company
that matches contractors with homeowners.
Talk to your insurance agent about what you're
planning, and he or she can guide you through
short-term coverage options.
two: Find an insured contractor
When hiring a contractor, check to see whether
that person is properly insured. "Make
sure they have workers' compensation for their
employees and have general liability insurance
for the company," says Lupberger. "What
that means is when a professional contractor
is working on your house, if a worker is injured,
you're not liable. If the contractor damages
something, destroys something or burns your
house down, you're protected."
Likewise, if something happens
to the contractor's tools or equipment while
the project is being completed, his insurance
will pick up those costs. Uninsured contractors
may charge you less for the job, but you'll
pay the price if something goes wrong during
the renovations. And even if a contractor
tells you he's insured, don't take his word
for it. "Have the contractor show you
a certificate of insurance," Lupberger
What if you decide to do the
project yourself? "In that case you don't
so much have a liability or a third-party
liability issue," says Richard Standring,
program manager for risk management advisory
services for Fireman's Fund Insurance Co..
As a result, there's no need for workers'
compensation or general liability insurance.
But, depending upon the scope of the project,
your insurance agent may suggest you hire
a professional instead. "We would never
recommend that a policyholder go out and do
any type of work that would require a license,
especially around an electrical or plumbing
system," says Standring. Also, if you
damage your property in the process and your
insurance provider determines that your negligence
caused the mishap, it might not pay the claim.