Insurance is often the last thing on a homeowner’s mind when making renovation plans. Yet, before any work begins, you should make sure that you will be properly insured during and after the renovation, both from loss or damage to your own property and/or claims from third parties for alleged bodily injury or property damage. Whether you are acting as your own contractor or you are hiring the services of a professional, you must make sure you are protected.
Professional Contractors always carry liability insurance and Workers Compensation coverage. They comply with municipal building permit and licensing requirements. This protects you. Without this protection, you could be liable for any injuries or damages that result from your building or renovation work.
Make sure you get proof of protection from these risks. Ask the contractor for insurance and Workers Compensation certificates. Make sure your written contract with the contractor spells out who is responsible for getting building permits and approvals. And because most homeowner’s fire and liability insurance doesn’t cover construction-related risks, contact your insurance company before construction begins. Inform them about your renovation project and make arrangements for any additional coverage needed.
Vacating Your Residence
If you are planning to move out during your renovations your insurance company will have to be notified. A contractor’s liability insurance does not cover losses for a vacant house. In this type of situation, the homeowner must notify their insurers and adjust the policy as necessary.
Depending on the circumstances involved, your insurance representative will either be able to arrange specific coverage or provide written confirmation that your own residential policy will extend to protect your property against direct physical loss or damage, and further that your liability coverage will protect you against claims from third parties for alleged bodily injury or property damage.
If you are acting as your own contractor you must also arrange Builders Risk coverage, either by a separate policy or by increasing the value of your residence to reflect the cost of the renovations. From a Third Party Liability Policy exposure, this is not considered a business pursuit and your personal liability coverage would respond to protect you against injury or property damage to third parties except liability imposed upon or assumed by you under any W.C.B. statute.
Personal Liability Insurance coverage under a Homeowners Policy normally excludes coverage for any business pursuits you may become involved in. Because of this, you should contact your own insurance representative for advice. Your insurance company may agree to extend your coverage, or you will have to purchase a Course of Construction Policy.
With respect to your own Homeowners Liability Insurance your insurance company will expect the work to be done in a professional manner. Such things as obtaining required permits and final inspection of the work by a building official is very important. These explanations are solely intended to remind you of the importance of discussing your planned renovations with your own insurance representative.
Each insurance company has different rules and regulations relating to home renovation work. This is why we recommend that you consult your insurance representative, rather than simply assume that you will be protected by your own policy.