Insuring Your Home Remodel Project

It can happen in a flash.

One minute there’s a crew installing new light fixtures in your kitchen, the next your entire home is engulfed in flames.

Each year, the media outlets are filled with stories about home remodeling projects that go awry. Many are humorous. Others are kind of sad. Then there are those that are downright dangerous.

All wind up costing the homeowners money, which is why it always makes sense to insure your home remodel project. In fact, taking necessary steps to insuring your home remodel project can reduce unnecessary risks.

Here’s a look at six reasons why:

1. There’s a lot of money at stake

Sure, a home remodel project is all about comfort and convenience, but it also has a lot to do with adding value to your home.

According to a CNBC story about Harvard’s Joint Center for Housing Studies, you can expect to recoup about 56 percent of the cost of the remodel in the form of your home’s value.

That’s a lot of money to be risking by going forward without insurance.

2. Remodels can be complicated

No two remodels are exactly alike. Everyone comes with its own set of challenges. That’s what makes them so exciting and difficult–for you and your contractor.

Anything can happen once walls start getting moved and wiring starts getting re-positioned. Sparks can fly, bricks can crumble and foundations can unexpectedly fall to pieces.

The last thing you want to do is have something go wrong and lose everything simply because you decided to forego insurance.

3. Contractors don’t always have you covered

If you are working with a contractor, you’re going to want to make sure they are licensed, bonded and insured.

And if your contractor is insured, you’re going to want to review the insurance with your agent to make sure the coverage is in your best interest.

For example, your contractor may have general liability insurance, which covers negligence on her or his part for personal injury or property damage. Or your contractor may have workers compensation insurance, which covers subcontractors who are injured on the job. Your contractor may also have builders risk insurance, which covers damage to materials.

What you want is a contractor whose insurance has it all covered.

Often, a contractor’s insurance won’t have all of your interests covered, meaning you may want to explore your own insurance options.

4. Doing it yourself can be dangerous

Many homeowners decide to do it themselves.

They run the numbers and determine that they can save a significant amount of money on labor costs if they do all the labor.

That’s true.

It’s also true that if something goes wrong–if the homeowner or someone else is injured or the home is damaged–the homeowner accepts all of the responsibility.

That can wind up costing you a lot of money if you don’t have insurance for your remodel project.

5. Different stages call for different coverage

Home remodel projects can be long, drawn-out processes. And that’s another good reason to invest in insurance for your home remodel project.

If you do get insurance, you’ll have access to an insurance agent who will be able to make sure you have the right insurance at the right time. Every step in the process will be covered–because your agent will meet with you from start to finish to make sure your covered.

That’s peace of mind that you simply can’t put a price on.

6. Sometimes things go wrong after the job is done

Yes, it’s true: Sometimes bad things happen even after a job seems to have been done well.

That’s the bad news.

The good news is there is coverage for that. It’s called “completed operations coverage,” and it covers things that go wrong after the job has seemingly been completed.

It’s things like contractors forgetting to install insulation around pipes (which wind up bursting when the weather takes a turn towards the colder).

If you have the insurance, you’ll be able to pay for repairs and anything that needs to be done to ensure the problem doesn’t persist.

But if you don’t talk to an insurance agent, you probably won’t have completed operations coverage.


Tags: contractor, coverage, home, project, remodel

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