Home and business
remodeling: are you adequately insured?
Summer has ended and so have many home and
business remodeling projects. Before sitting back and enjoying the improvements,
make sure you have the right amount and type of insurance to cover your renovated
home or business.
A good place to start is to talk with your insurance agent or
company to make sure you are adequately insured and fully protected against a
covered loss. Depending on the addition or
improvement, you may need to increase your level of coverage.
It may be tempting to save
money by not informing your insurance company about remodeling changes made to your home or business. But that approach can have
severe financial consequences if you have a large fire or other major
loss. You could find yourself on the
hook for tens of thousands of dollars – all to save a few dollars in the short
run.
NW Insurance
Council and Insurance
Information Institute offer the following tips to help you adequately
insure your remodeled home so you can avoid some of the common pitfalls of home
and business improvement projects:
·
If you’ve recently remodeled your home or built an
addition, contact your agent or company immediately to determine if you need to
increase or change your coverage.
·
If you’re planning a remodeling project, contact your
agent or company before construction begins.
If your new addition is damaged or destroyed before the new coverage
starts, you may be responsible for the repairs and rebuilding costs.
·
If you’re planning a do-it-yourself project, make sure
you have sufficient liability protection in case someone gets injured during
the project. Also, only take on remodeling projects you are qualified to handle.
·
For large remodeling projects, consider getting a
builder’s risk policy, also known as a “course of construction” policy. This
coverage is available as a stand-alone policy or as an add-on to your Homeowners
policy and generally protects your home from damage during construction, such
as wind, rain damage or theft.
·
If you’re hiring a contractor, make sure the
contractor is properly insured, bonded and registered through the Department of Labor & Industries. Ask the contractor to show you copies of the bond. You also can check if the contractor has any
complaints filed against it by looking online.
·
Also make sure the company has Workers Compensation
coverage. Ask for a copy of the
policy. Workers Compensation covers
medical expenses and lost wages if workers suffer injuries on the job. A contractor’s employees could sue you if the
contractor doesn’t have the proper insurance.
·
Check references to verify the quality of a
contractor’s work. To find a reputable
contractor, check with your local homebuilders association.
·
Take photographs before, during and after the
renovation so you have a visual record of work done on your home or business.
Also, keep copies of any contractor contracts and keep receipts for work done
and materials purchased.
·
Consider getting more liability protection if you
added a swimming pool or hot tub. You may want to ask your agent or insurance
company about getting an excess or umbrella liability policy as a
cost-effective way to increase your overall liability protection.
·
If you buy additional items such as furniture,
exercise equipment and electronics, you may need to increase your coverage for
personal possessions. Talk with your insurance
agent or company. Keep the receipts,
take pictures of the new items and keep them with your home inventory.
·
NW Insurance Council offers free downloadable Home
Inventory Software created by the Insurance Information Institute.
