Home Insurance and Home Improvements
How the Two Go Hand in Hand to Protect Your Investment
DENVER, CO, February 11, 2008 — As the recession looms and foreclosures continue, more home owners are choosing the home improvement route to avoid having to qualify for a new home loan or deal with the current real estate market. If you are considering a new home improvement project, it is critical that you talk to your insurance agent about what changes and increases you’ll need to make to your current home insurance policy. Doing so, along with reviewing your liability policy, will ensure you’re protected throughout your home improvement project.
Preparing for Your Home Improvement Project
It is very important to make any necessary increases in coverage before your home improvement project starts.
Most everyone is on a strict budget these days. Since improvements you make to your kitchen, bathroom, or additions will raise your home’s value, you can expect your premium to increase as well. Knowing what that will be will avoid surprises down the road.
Also, you’ll want to have this added home insurance coverage active prior to starting construction. If something goes wrong and any part of your home is damaged during rebuilding, you will have the added coverage you need to make sure the home improvement project is still completed. And this will happen without having to pay out–of–pocket.
Liability Coverage and General Contractors
When you’re interviewing potential general contractors, in addition to getting competitive bids, ask to see a copy of their workers compensation policy. You may also want to show this to your insurance agent when discussing your existing liability insurance coverage.
If the contractor doesn’t have adequate insurance and one of their workers gets injured while working on your home, that worker could turn around and sue you instead of their employer. This could really throw your bank account into a loop, because those costs could include not only their medical and rehabilitation expenses, but any lost wages during their time of recovery.
You’ll also want to find out the level of insurance coverage the subcontractors have, which could include plumbers or electricians hired by your contractor. The same issue will apply with these companies or individuals.
With this information in hand, you can make a more informed decision on which contractor to choose. You’ll also be prepared to work with your insurance agent to determine what additional liability coverage you will need to protect yourself. Since that type of coverage is typically limited to $100,000 or $200,000, depending on the policy or insurer, you may consider an umbrella policy, which picks up where your liability leaves off, providing coverage up to $5 million dollars.
When All is Said and Done
You’ve survived the trials and tribulations of your home improvement project and are now settling into the newer version of your home. Finally, life can get back to normal.
You have your home’s increase value covered, but did you buy any new items for the home? Any furniture for the new family room, a new HDTV or home entertainment system? Don’t forget to add those to your home inventory list and see if you need to add or increase the value of your policy’s floater to provide added protection for personal possessions.
Since you’ll want to contact your insurance at the completion of your home improvement project to review your policy once more, this is a great time to discuss any additional coverage you may need.
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