Notify Your Insurance Agent Before Starting a Remodeling Project

Winston-Salem, NC 3/22/2013

In 2013, home improvement activity is expected to increase considerably. For those who plan to be a part of this growing segment of homeowners, it is important to have the right type of insurance and the right amount of coverage in place. Insurance specific to the scope of the project should be in place during and after the construction phase. Anyone considering a remodeling project should contact an agent before the process begins. Many clients must alter their coverage to add specific endorsements related to the temporary construction exposures. Waiting until the project starts, or is nearing completion, can be an expensive mistake. Please take the following four important steps to avoid potential coverage problems down the road:

 1. Discuss any home improvement plans with an agent. Ask about updating your homeowners policy, and ask whether or not other types of insurance will be needed for protection during the construction process. Is a Builder's Risk policy appropriate?  Only homeowners who are truly qualified to perform do-it-yourself (DIY) projects should attempt them.  People who are not construction workers should be allowed onto your jobsite unless there is sufficient liability coverage for their protection. Many homeowners must raise their no-fault medical protection (medpay) limit for such workers.  For a larger project, it is best to consider a course of construction or builder's risk policy. This policy properly covers the home during the building process from weather, theft damages, and other constructions-related exposures.

2. Make sure the contractor is covered. Before allowing a contractor to start work, ask to see their insurance policies. Contractors should carry both Worker's Compensation and Commercial General Liability insurance with appropriate limits of coverage.  If the contractor has the necessary covergage, a bodily injury to one of the insured contractor's workers, will not  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 about avaliable discounts. When people install smoke detectors, stronger doors, deadbolt locks or burglar alarms, they may qualify for discounts. Some insurers also offer larger discounts to people who install more sophisticated burglar alarm systems, sprinkler systems, fire alarm systems or other devices. 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. In areas prone to strong storms, shutters, reinforced roofs and shatterproof windows may also result in discounts. If a remodeling project is the result of a growing family, be sure to consider other insurance expsoures that follow the arrival of a new baby!

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