How to ensure your insurance covers a home renovation
Spring is on its way and homeowners might be looking at all the ways they can increase the value of their home during the warmer months.
One of the steps necessary in planning a renovation is notifying your insurer if necessary. Different levels of home improvement require different types of disclosure that you must provide to your insurance provider. A simple paint job doesn't need to be disclosed, but if you're doing anything major, you need to do your due dilligence.
Major projects include renovations such as making changes to partitions or load bearing walls, changing the structure of doors or windows, building a garage or addition, finishing a basement, etc.
Leaving your home for an extended period of time
If you’re planning to vacate your home for a few months as the renovations break ground, are you still covered?
You might be surprised to read your policy as it explains that you’re not covered while your home is being renovated. Is there a way to navigate your renovation while retaining your insurance coverage?
Homeowners get so caught up in the renovation details that they make the mistake of not notifying their providers. They fail to disclose the renovation beforehand, to find out later that most renovations nullify your insurance agreement. On most policies, vacating your home for more than 30 days is an automatic insurance violation that will leave you with the bill if you need to make a claim during the renovation, or afterwards.
To avoid this breach of contract, all you need to do is ask your insurer for something called a Vacancy Permit that will cost $25 to $50 more for full coverage during your absence.
Large renovation, short time period?
What if your renovation is rather substantial, but doesn’t take 30 days or more to complete? This may occur if you’re doing one room at a time.
Things like exposed walls and electrical work could cause your insurance company to change your policy to an “under construction” policy, which has different variables that take into consideration what you’re changing, and the process by which you are changing it. They wouldn't cover you for leaks if you didn't have a roof, would they?
On top of all that, you should make sure your contractor has insurance, too. It will cover liability on the contractor’s end in case anything goes awry physically or structurally.
Always be prepared and proactive.
If, by chance, you have just completed a renovation without informing your insurance provider, then you need to notify them as soon as possible. They need to know how much value you have added to your residence in order to insure you properly.
If you need something replaced after an event of total loss, how can they really be sure you upgraded your entire kitchen if you never told them?
Your premium will increase by marginal amounts, but it will cost you less overall if you have to replace all your things out-of-pocket.
This is true if you have completed the renovation while following all the proper steps as well. Providers need to know all the details and additions necessary to ensure you're covered for the right items at the right valuation.