When renovating your home, most people tend to think they have everything planned out by the time the contractor starts tearing the house apart. However, most people forget about involving their home insurance broker to provide renovation insurance coverage to protect their house during and after renovation. Don’t be one of those people.
The Importance of Home Insurance When Renovating
While contractors are required to have insurance for their services and workers, it may not cover all the risks involved with the renovation. Accidents that occur while renovating and after the job is complete might not be covered due to faults or mishandling of the process. It is crucial to ensure that your contractor has adequate coverage before they begin the job. If you have a contractor doing a renovation or building a new home for you ask them about their policy and if they have a builder’s risk policy.
Here are a few other risks that most people don’t think of during a renovation:
Many home insurance policies require that the home remains consistently occupied to ensure that the home will be well maintained and protected. Vacating your home to allow the contractor room to undertake the project may be violating your insurance policy if the renovation exceeds 30 days. For example, if the house was burglarized while you were vacant, the claim would most likely not go through. As such, it is important to notify your insurance broker beforehand to acquire a vacancy permit or else your insurer may fine you or void any claims, depending on the policies terms.
While renovating comes at a price, it also adds value to the home. The added value of the home could cause the premium to increase or decrease depending on the work done. If the homeowner was to update the roof or electrical work, the premium would most likely go down even though the value of the home would go up. It is important to work closely with your insurance broker and keep them informed of the renovations to adjust the policy as necessary.
Failure to do this may cause confusion in case of accidents as the renovations will not be covered, forcing the insurance company to only partially refinance you. And believe us, that isn’t fun!
Make sure to involve your insurance broker when undertaking renovations to avoid incurring losses while also ensuring that your home’s new value is accounted for. For best results throughout the renovation insurance coverage process, it’s best to hire an expert. McDougall Insurance is here to help. Check out our contractors insurance page or our home insurance page for more information and contact a local broker to get started.