Homeowners Insurance: What you Need to Know
If you are planning to remodel or renovate your home, there are many factors to take into consideration prior to the start of the project. You need to envision what you want the room, rooms, or addition to look like when they are finished. You need to set a budget for the project, just so you don’t get sticker shock at the end of the process, not realizing how much you spent along the way. You need to decide on designers, contractors, fixtures, paint colors, the list seems to go on and on.
One important thing many people overlook though is to check with your homeowners insurance to see what your policy covers. All policies are different, so please don’t simply assume that the umbrella of coverage is as large and encompassing as you think it may be.
At GreatBuildz, a free service that connects homeowners in Los Angeles, Orange County, Ventura & San Diego with reliable general contractors, we want every homeowner to be thoroughly prepared for their remodel.
Here are 8 homeowners insurance-related items to think about before you start a home remodeling project.
Make Sure your Contractor’s Insured
Make Sure the Contractor’s Policy Includes Completed Operation Coverage
Check to Verify that their Tools and Equipment are Covered under their Policy
If he or she has a portable storage unit on your property in which he stores his equipment for the nights or weekends, and an out of control vehicle runs through your yard, slamming into it- and takes off before anyone comes outside to investigate the ruckus, you don’t want him to make a claim on your homeowners insurance policy.
Look into Getting a Builder’s Risk Policy
This policy will cover all materials and fixtures prior to their installation. This is nice to have given the world in which we live. This protects you against theft and vandalism, which are common nowadays on construction sites. This policy also covers any new structures (deck, gazebo, addition) during construction.
Speak to your Agent About Boosting Your Coverage
After your project is finished, the value of your home will obviously increase, especially if you wind up adding room (square footage) to your house or constructing an ADU on your property. Be sure to inform your insurance agent of this addition and about boosting your coverage to the level you will need to protect the new value of your home. God forbid something would happen after the completion of the project that destroys your now $350,000 home, and your pre-remodel policy only covered you for $300,000. I couldn’t imagine how upset I would be.
Most likely, you will need to extend your coverage limits and/or purchase additional coverage to encompass your new space/ADU. If you plan to rent out your new home or ADU, consult with your agent about obtaining a landlord policy that covers a variety of tenant-related issues.
Review your Coverage on a Yearly Basis
It’s always proactive to review your coverage on a yearly basis. Also, check yearly to confirm the value of your home. This type of thing can change without your knowledge, and it’s always comforting to know that you have enough coverage to offset the worth of your home in case of anything.
Make Sure your Property and Belongings are Covered While the Work is Being Done
Depending on the scope of the job, you may need to move furniture and boxes of your treasured possessions to a storage unit. If your policy doesn’t cover these items, you may have to get a separate policy for them. It’s better to think ahead and be safe than to just assume that your policy covers these types of scenarios.
Be Specific with your Agent
Tell your agent exactly what you are doing. Let him or her know what you are adding and what rooms are involved. And be completely honest and transparent about it. For instance, if you build a gazebo to overlook your garden, and Aunt Nancy falls in it, shattering her elbow, you really can’t make a claim if the agent doesn’t know about this new structure.
Homeowners Insurance is something we all really should have, but something we hope we never have the need to use. Still, in those unfortunate times, we are forced to call our agents and file a claim, it’s less stressful when we know they have our backs.
If you want to learn more, or if you’re ready to take the next step and talk to a local contractor or designer/architect about your specific project in Los Angeles, Orange County, Ventura & San Diego, feel free to call one of our friendly GreatBuildz staff at 818.317.3567 or submit your project at www.GreatBuildz.com.
Check out the GreatBuildz Guide Blog for more construction tips and advice for any type of home remodeling project!