4 Steps to a Successful Home Renovation Project
When undertaking a remodeling project, people often forget to review their insurance needs. Whether your budget is large or small, you’re adding to the value of your home and your exposure to risk. Here are 4 steps to ensure your home renovation project continues smoothly, and you have the coverage needed.
- Insure the Real Value of Your Home
Experts estimate that one-fourth of remodeling projects add at least 25% to the value of a home, yet often most homeowners forget to increase their coverage to protect their investment. Most homeowner’s insurance policies require 100% of the home’s replacement cost. Therefore, it’s important to raise your home’s policy limit before your project begins.
- Save on Your Premium
• Consider raising your deductible.
• Invest in a home security system.
• Update exterior locks to dead bolts.
• Install smoke alarms.
• Select an automatic payment method.
• Monitor your credit rating.
• Ask about multi-policy discounts.
- Hire a Reputable General Contractor
The best way to minimize your renovation risk is to hire a reputable general contractor. As part of the biding process, ask the general contractor to provide a Certificate of Insurance and/or copies of the policies. Specifically, check for the following coverages:
• Workers’ compensation: Verify that he or she has workers’ compensation coverage if an employee or subcontractor is injured on the job.
• General liability: Ask if the contractor has liability insurance covering losses due to negligence and errors or omission, which could result in property damage. Also, request that you’re added as an “additional insured.”
• Builders risk: This policy is designed to cover damage to your home and materials, including those not yet installed. We can help you verify whether you should require this from your contractor based on your renovation project. If they don’t carry the proper coverage, they’re not the right contractor for the job!
Talk to a Trusted Insurance Partner
Adding to your home is exciting, but poses financial risks. Set up 15 minutes with us to discuss your home renovation project and/or learn more about how to protect your growing assets.
Bonus Advice for Do-it-yourselfers
If you decide to do it alone and manage a renovation yourself, you assume all the risk. A review of your homeowner’s policy for proper liability and property coverage is essential. If a friend or relative helps as a favor—no money changes hands—and gets injured, your homeowner’s insurance typically covers the cost of their injuries (up to your policy limits). It’s important to note a homeowner’s policy is not designed to provide primary liability protection for these injuries. If the individual is seriously injured, the domino effect can be financially and emotionally difficult for everyone involved. For an extra layer of protection, consider carrying umbrella liability coverage, which kicks in to provide liability coverage above your homeowner’s limits.
Take 15 minutes to speak with us and get a personalized list of options for your home renovation.
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