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When planning a renovation, people spend many hours preparing: making key decisions on the renovation plan, selecting an architect, designer and/or contractor, picking materials and getting the residence ready for the project. One additional consideration, which is equally as important, but sometimes overlooked is making sure to notify your insurance agent or broker and updating your policy to avoid a gap in coverage. Here are some questions that you should be prepared to discuss:
1. What type of renovation is it? Some examples of a project scope include:
Adding square footage.
Upgrading rooms like a bathroom or kitchen.
Altering the layout of the house by moving walls, doors and the like.
Finishing a previously unfinished space like a basement or attic.
Adding outdoor features, perhaps a pool or pool house.
Upgrading/maintaining older features like a roof, windows, electrical or HVAC system.
A “large project” or “major renovation”. To determine if your renovation is a large project, a good rule of thumb is to ask yourself: will the project be higher than 10% of my current dwelling limit, or over $500K?
2. How long will the project take and what is the timeframe of the project; a few weeks, a few months or a few years? This will make a difference.
3. Will the home be occupied or vacant during the construction?
4. Will your personal property be moved to another location outside the residence?
Many times furniture and other personal belongings will need to be properly and safely stored offsite during the length of the project. Does your current policy provide coverage for this?
5. Is there a signed contractor’s agreement that outlines the insurance requirements?
6. Does the GC have proper insurance coverage for the company and its workers and are subcontractors expected to maintain proper levels of insurance coverage?
7. What is the project budget?
8. Is the existing value on your homeowner’s policy adequate coverage or does it need to be modified?
Many homeowner insurance contracts have clauses that limit what can be paid in the event of a claim if the insurer is not notified in advance of a renovation project. In order to make sure you are not penalized in the event of a loss, it is essential to discuss your renovation plan with your insurance representative, before you start your project.
Questions? Get in touch today.