We budgeted $100,000 to upgrade our home. What we didn’t budget for were the problems that developed. Because of the scope of the renovation, and thinking of the safety of our young children, we decided to move out of the house for two months. We selected a contractor and everything went well until a hot water pipe sprung a leak over the weekend and no one noticed until Monday morning. This caused $23,000 of water damage on the main floor, and in our finished basement. It only went downhill from there.
We found out that neither the contractor, nor the plumber had general liability insurance. So, we turned to our insurance company, but they said they couldn’t pay for the damage because we had moved out of the house for two months leaving it “vacant.” Now we are left to pay for the repairs and we still don’t have our renovations done! I just wished I had known how to protect ourselves!
You can avoid the same disaster.
Here’s how:
Before hiring a contractor, large or small, make sure the contractor has workers’ compensation and third-party liability insurance for all the people on the job and damage that they may cause. Typical coverage for home renovations in most urban and suburban areas is $2 million. Check with your local homebuilders’ association for what the standard is in your area.
Don’t just take the contractor’s word that he/she has the appropriate insurance—ask to see a certificate and check to make sure it’s current. Don’t accept or assume any liability for the contractor or trades people.
Finally, if the renovations to your home are major, or you move out while the renovations are being done, it is important to notify your insurance broker to be sure that you have the correct coverage in place during the construction period.
Any questions? Contact us to get the advice you need to stay protected.
