Insurance checklist: we’ve got you covered!
Before you begin a renovation, or building that extension to your home, you want to make sure you are protected in the event of an accident. Here are some basic steps you can take to protect yourself and your castle.
"Accidents do happen", says @StephenFanuka. Make sure your home insurance gives the protection you need.
The first step is to speak to your insurance agent and tell them exactly what you are doing. The added renovation will likely add more value to your home, so you may need additional coverage. Your agent will advise you. Make sure the new addition is specifically mentioned as "covered" in the policy.
You also want to be sure the new tiles, lights, plumbing fixtures and other new fixtures and finishes you are buying and adding to the home are covered in the event of loss or theft.
Most importantly, don’t wait until after the renovation is done to visit your insurance agent. Make this your first stop. If you wait till after, and something goes wrong or gets stolen, you would likely not be covered.
You’ll also want to check on the amount of liability coverage you have. For example, let's say you and a friend are doing the renovation together. A DIY project where nobody is being paid.What if that friend gets hurt? You want to make certain you are protected from any law suits.
Be sure to use a licensed plumber and electrician for you renos. Some insurance policies stipulate in fine print that, in the event of an accident, the company has a right to void your policy (and your claim) if the accident was caused by the work of an unlicensed plumber or electrician. Believe me, the insurance company will check.
Make sure you also file all permits and have the required site inspections by your local building department. Trust me, the insurance carrier will check carefully and it’s required by law.
Your contractor needs to have a workers’ compensation and disability policy, in case an employee gets hurt on your job. Your contractor also needs to have liability insurance.
I tell all my clients to make sure that you, the owner, is listed as the "Certificate Holder" on the insurance certificate the contractor will give you for your files. This is very important. Let's say the contractor gives you proof of insurance and a week later he cancels the policy or doesn't pay the premium on time. How will you know the policy was cancelled? Once you're listed on the certificate as the "Certificate Holder," the contractor’s insurance company is obligated to send you a letter notifying you of the pending cancellation of the policy, before it is cancelled. You could stop the job and make sure the policy is in force before an accident happens.
You should also request a separate insurance certificate listing you, once again, as the "Certificate Holder" with each separate subcontractor or firm the contractor hires to work on the project. This includes the plumber, the tile man, the carpenter and others. Even debris removal. If they step onto the job site, they need to have insurance. To be safe, I suggest at the time of contract that you require the contractor to list each subcontractor or firm by name, and provide their information, before you sign the contract. This way, you can assure yourself that you have everybody's proof of insurance.
No one likes to pay insurance premiums, and following my advice may even cost you a bit more. But nobody expects accidents to happen. When they do, I promise you will sleep a lot better knowing you are insured and still have a roof over your head.
Don't worry. I’ve got you covered. Now let's get to work!