Signs of summer’s approach are everywhere: Flowers are blooming, temperatures are rising, days are getting longer—and your neighborhood is filled with the sounds of saws and hammers from construction projects. This season is one of the busiest times for home renovations. If you’re remodeling or building an addition, you’ve probably spent time researching contractors, selecting the latest products, and setting a budget. However, many people fail to fully research how the project will affect their homeowners insurance. It’s an essential step, as renovation projects involve some risk. Here are four things you can do to make sure you are properly covered.
- Check your contractor’s license and insurance. Make sure your builder has commercial business/general liability and workers’ compensation coverage, which typically pays medical costs if one of the contractor’s full-time employees gets hurt while working on your renovation. If your contractor plans to hire subcontractors, such as plumbers and electricians, check that they also have this coverage. The AAA Home Improvement and Repair Network can be a resource to locate contractors who have been prescreened for license, insurance, and financial stability.
- Call your insurance agent or insurance service representative if you are planning a remodeling project. Whether you’re building an addition to your home, or doing a home improvement such as replacing your tile kitchen countertops with granite or tearing out carpet and putting in hardwood floors, you want to make sure you would have enough insurance to replace these upgrades if you had to rebuild your home.
- Check for codes and permits. If you’re hiring a contractor, make sure he or she pulls the necessary permits so the project is up to code. Do-it-yourselfers should call their local building department to see if a permit is needed. Many projects—including electrical or plumbing, and additions—require one. Other projects may have specific requirements, such as making sure your retaining wall is a certain height. Understanding these requirements prior to starting a project can help avoid later issues or fines. If you sell your home, having a permit will also be proof that the renovation was done correctly.
- Review your current coverage. Even if you are not currently remodeling, it is important to make sure you have adequate coverage in the event you suffer a total loss and have to rebuild. Be aware that many code upgrades are required for renovations or rebuilds. You will be required to rebuild to current standards, and that can add significant cost to your project. Your insurance agent or customer service representative can assist you with a comprehensive policy review to give you peace of mind.