Sunday, August 24, 2014

Know Your Insurance before Remodeling

Homeowner’s insurance is not the most exciting of subjects. Home renovation is much more interesting. The home is a focal point in our lives and anything that makes it better is fascinating. But remodeling and insurance are very closely linked and to ignore the insurance issues involved with home remodeling is to court disaster. With every good thing that a remodeling can achieve, there is also the potential for things to go bad. Insurance is your protection when things go wrong. Normal homeowner’s insurance will not provide the coverage needed when major remodeling is underway. For example, if 50% of your home is destroyed because of a remodel going bad, the homeowner’s policy will only cover the part that is intact. You should have a builder’s risk policy to cover the cost of what needs to be rebuilt.

Are Your Contractors Insured?

The contractor you have engaged to do your remodeling is highly reputed with great references. But even the best can make mistakes. Before hiring a contractor take the time to ensure that they, and all the subcontractors they may use, are not just licensed but also bonded and insured. While asking to have a look at the certificates of insurance is essential, many insurance experts recommend going one step further and contacting the insurers to make sure that the certificates are genuine. These experts also say that contractors should ideally carry a minimum of $1 million coverage for each type of insurance they have.

Add Yourself to the Contractor’s Policy

The contractor will have a general liability insurance policy. It makes sense to have yourself added to the policy and it costs little or nothing. If this is done then you will be fully covered against liability for any damage that may happen during the course of the remodeling such as a water main being damaged or broken and causing a neighbor’s property to be flooded. Having your name added to the policy has another advantage – if the policy lapses while the work is underway, the insurer will notify you.

Will the Value of Your Home Increase?

Many remodeling projects can increase the value of a home. An example of this is a kitchen remodel or a room addition. If your home is destroyed after the remodel, it will cost more to replace. It is a good idea to check your homeowner’s insurance policy to ensure that the coverage you have is enough to cover the cost of rebuilding a home that is more expensive than it used to be. Many insurance policies do contain a replacement cost endorsement that will cover the cost of rebuilding your home. Do you have it?

Remodeling and Peace of Mind

Home remodeling can be a stressful experience with costs to be controlled, deadlines to be met and contractors to be dealt with. These are a part of all remodels and there is no way to escape them. But the fear of financial loss when things go bad is an unnecessary burden and one that you need not carry.
Talk to Insurance by Allied Brokers to find out about the additional coverage you need to protect yourself when your home is being remodeled. Call us at 650-328-1000 or visit our website at

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