If you’re thinking about a home renovation project – whether it’s finishing your basement, putting in a new bathroom or any other project – you really should check your current homeowner’s insurance policy. Why? Because if damage happens to your home during the renovation, you need to know you’re covered. Also, if you’re adding value to your home, you’ll want to make sure your replacement cost is adjusted to match the new amount.
What IS covered during a renovation?
Your renovations are covered for the same perils as the rest of your dwelling, as long as the policy is updated to do so. The same goes for any work performed inside or outside of your house. So, if your contractor causes a fire, breaks a window, or drops a ladder on your dining room table for example – your insurance will cover it.
What’s NOT covered?
Your homeowner’s policy will not cover damage caused by faulty workmanship or costs you incur because you’re not happy with the renovation. However, depending on the cause of the damage to your home, your insurance company may help you pay for repairs quickly and then seek recovery of payment from the contractor or their insurance.
So, make sure your contractor has a commercial general liability insurance policy
Before starting to work with any contractor, request that they have their insurance agent email a copy of their CGL insurance certificate directly to you. It’s also a good idea to share this certificate with your own insurance broker. You’ll also want to carefully review any guarantees or warranties they offer, to make sure you are satisfied with how they plan to stand behind their work.
Renovate with confidence
Now that you’ve talked to your insurance broker, reviewed and possibly updated your homeowner’s policy to reflect the value of the renovation, and found a contractor you trust that has appropriate CGL coverage – it’s time to make your renovation dreams come true. Always remember that even the smallest project comes with potential risk to your property and the last thing you want to do is increase your renovation budget to cover renovation damages. Happy renovating!