Before the remodel: Insurance needs for a major home project

Herald Democrat (Sherman, TX)

With warmer months approaching, many homeowners are looking ahead toward remodel and renovation projects around the house. While finding a good contractor and a good deal on supplies are a part of the process, local insurance companies are reminding homeowners to consult their agent ahead of a major project.

While general contractors are bonded and carry their own insurance, there are other parts of the project that are not automatically covered, said Stephanie Phillips, representing Phillips Insurance Agency in Denison.

"It is always a good idea to check in with your insurance agent and see if you need to add builder's risk endorsement to your policy," Phillips said. "Sometimes it can save you money if you are upgrading your wiring and plumbing. Insurance companies like that."

Under the builder's risk clause, you can input how much of an investment you plan to make, and the coverage will increase as the investment is made. This will cover things like supplies that are owned by the homeowner, not the contractor, and don't fall under the contractor's insurance. Phillips said she ran into a situation where builder's risk ultimately saved her money. During a renovation project in her home, a bathtub and other plumbing fixtures were stolen from the site.

As the project is completed, Phillips said the builder's risk clause can be converted into the general policy. Even if builder's risk is not used, Phillips said it is a good idea to speak with an agent to ensure that the upgraded value will still fall within an existing policy.

In other cases, some improvements may not be covered or will require a specific clause in the policy. As an example, Phillips said a wood-burning stove requires specific documentation as a part of the insurance policy. Not having the proper documentation can lead to the loss of the policy.

While landscaping and outdoor improvements generally are not covered in insurance policy, some improvements may require homeowners to adjust their liability. Phillips suggested that homeowners who are considering installing a pool speak with their insurance agent ahead of time to make sure their liability covers any possible accidents.

"You need to absolutely notify your agent to make sure you are covered in the event of a loss," she said.

Another common liability issue is the addition of a trampoline, which Phillips described as an "attractive nuisance." Other forms of improvement that come with liability are steps, especially those without handrails. With these improvements, Phillips said it is important to stay within the guidelines of the policy.

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