Thursday, December 22, 2011

Four Ways To Protect Yourself When Hiring A Contractor To Remodel Your Home

Remodeling a home is a major financial investment. There are many pitfalls that you may encounter during the process. Among of the most potentially costly are those that involve disputes with the contractor. Even with the best of contractors, misunderstandings and communication gaps can turn what should be happy experience into a situation filled with acrimony and financial loss. Here are four simple things you can do to protect yourself from contractor related losses:

1. When signing a construction contract, be sure the General Contractor adds the homeowner as an additional named insured on his liability policy. He should also provide a certificate of liability and workers compensation insurance. The certificate must state that the homeowner is given two weeks prior notice of cancellation and if no insurance is in place, the work will either stop or the homeowner can purchase replacement coverage at the contractor’s cost.

2. Ensure that all payments to subcontractors are made only by the General Contractor. This places primary liability on the General Contractor and his insurance.

3. Ensure that the General Contractor’s policy limits are more than the complete value of the home. If the coverage is not sufficient, an additional amount can be added at a nominal cost.

4. Before buying into an HOA, check who is responsible for replacement, repair and/or rebuilding of damaged property. Every HOA is different but the most common split is that the HOA is responsible for rebuilding all the original building from the interior walls out. The unit owner is responsible for floor coverings, interior walls, fixtures, plumbing, appliances, cabinets etc. along with all of the unit owner’s personal property.

To know more about the insurance precautions that you should take before remodeling your home, contact Allied Brokers. Our many decades of experience in all types of insurance and our focus on client service means that we provide not just the best in insurance policies, products and services but also the advice you need to stay protected at all times and under all circumstances. Visit our website: for information on the services and insurance policies we offer. Call 1-888-505-7988 (toll free) for a free rate quote.

The above information has been provided courtesy of the Law Office of Peter N. Brewer Esq. Palo Alto, CA (phone: 650-327-1900)

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