For those who plan to to remodel your house, it is important to have the right type of insurance and the right amount of coverage. Insurance should be in place during and after construction. Anyone considering a remodeling project should contact an agent before the process begins. Many people must alter their coverage or add more. Waiting until the project starts or is finished can be an expensive mistake, so take the following four important steps to avoid an expensive problem.
1. Discuss home improvement plans with an agent. Ask about updating a homeowners policy, and ask whether or not other types of insurance will be needed for protection during the construction process. Only those who are qualified to perform DIY projects should attempt them. People who are not construction workers should not help unless there is sufficient liability coverage for their protection. Many homeowners must raise their no-fault medical protection limit for such workers. For a larger project, it is best to consider a course of construction policy. This covers the home during the building process from weather or theft damages.
2. Make sure the contractor is covered. Before allowing a contractor to start work, ask to see his or her insurance policies. Contractors should carry both workers compensation and commercial general liability insurance. If one of the insured contractor's workers sustains injuries, that individual will not be able to sue the homeowner. Contractors who are unwilling to provide insurance documents should never be hired.
3. Store all receipts and records. Be sure to take photographs before, during and after the remodeling project. This provides a virtual record of what the property looked like during each phase. Hold on to all contracts from contractors, and be sure to save the receipts for all materials purchased. Keep receipts for any other belongings bought for the home during the project.
4. Update insurance policies after the project. Let an agent know when any home improvements are made. Insurance amounts may need to be increased following a major renovation. All of the records and receipts may need to be copied and sent to the insurance company. This helps them assess needs and assign accurate values for the improvements. An agent will be able to recommend a floater or endorsement for more expensive items. More liability coverage may be needed if a pool or spa was added. An umbrella policy may be the right solution for this situation.
Be sure to ask an agent about discounts. When people install smoke detectors, stronger doors, deadbolt locks or burglar alarms, they may qualify for discounts. Some insurers also offer larger discounts to people who install more sophisticated burglar alarm systems, sprinkler systems, fire alarm systems or other devices. People who update their plumbing, electricity, roof or windows may also qualify for discounts. This is especially true if any energy-saving features were installed. In areas prone to strong storms, shutters, reinforced roofs and shatterproof windows may also result in discounts. If a remodeling project is the result of a growing family, be sure to consider other insurance changes that may positively benefit a new spouse, baby or adopted child.