Expanding Your Insurance Coverage to Include Remodeling and Upgrades

By July 3, 2012No Comments
It is expected that home improvement activity will pick up in 2012. If you are planning to upgrade or remodel your home, you can expand your homeowners insurance policy to include improvements to your property.
Getting Insurance Coverage for Remodeling or Upgrading Your Home
Call your insurance company and let them know about your plans to remodel. Ask about updating your homeowners insurance, and find out if you need any other types of protection while the project is ongoing.
If you are planning a do-it-yourself project that involves friends and family, you may want to increase the amount of no-fault medical protection on your policy. If someone is injured, the medical bills can be submitted to your insurance company. Having this type of coverage is valuable because it will reduce the risk of being sued.
For larger remodeling projects, get a builder’s risk policy. This type of policy may be available as a single, stand-alone type of policy, or it can be added on to your current policy. Getting this policy will protect your home from damage during the construction process. The damages covered include wind, rain and theft of materials.
The Amount of Coverage You Should Have
Upgrading or remodeling your home adds value. In fact, experts have estimated that one-fourth of all home remodeling projects will increase the value by 25 percent. Unfortunately, most homeowners do not increase their coverage to accommodate the rise in value.
Since homeowners insurance covers the replacement value of your home, you need to find the amount it would cost to build the home with the improvements you are making. Most contractors would have the answer to that question. This is the amount of insurance you will need.
All home insurance policies cover upgrades to your home. However, there can be exclusions to coverage. Do-it-yourself renovations that fail to meet local building codes will be excluded from coverage. Be sure that everything is up to code. It would also be wise to get a building permit for larger remodeling projects.
Verify Your Contractor’s Insurance Policy
If you plan on hiring a contractor to do the work on your home, ask for a copy of his or her insurance policy. There should be a business/general liability policy and a workers compensation policy. If the contractor cannot verify insurance coverage, consider hiring someone else for the project.
Keep a Record of Everything
It’s important to take photographs before, during and after your home renovation. Having a visual record of all the work being done on your home is beneficial. Keep copies of the contract that you signed with the contractor. Keep a copy of any receipts for materials purchased during the project. If you added furniture or appliances to complete the project, add these to your home inventory list.
Helpful Tips
Ask your insurance agent about discounts. If you have added items that keep your home safe, you may qualify for an insurance discount. Items such as stronger doors, burglar alarms and smoke detectors all fall into the safety category.
Consider raising your liability protection if you have added a swimming pool or a hot tub. These items are considered to be attractive nuisances by insurance companies, and they can leave you vulnerable for lawsuits.
Guest Blogger Bio:Elizabeth Adams’ passion for helping others, DIY projects and architecture has allowed her to pursue a career in writing. She currently writes for Homeowners Insurance website.
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