Staying covered while renovating
THE decision to build or renovate a home presents a number of unforeseen insurance risks, not only due to the increased chance of hazards such as fire or water damage that construction work can present, but also through the use of disreputable contractors.
When coupled with the fact that most insurance policies restrict cover while buildings are renovated, it becomes even more critical for homeowners to ensure they are aware of the pitfalls of invalidating insurance cover during this time.
Distracted with selecting paint colours, floor coverings or cabinet types during renovations, homeowners often forget about the most important task of all: choosing a reputable contractor to handle the project. By not using a reliable contractor, homeowners place themselves at risk of insurance claim repudiations if the building or structure collapses or starts to deteriorate.
It is not a good idea to pick the first contractor; selecting a contractor should be a wellresearched process that is not rushed but rather involves a thorough evaluation. Homeowners should start off by sourcing several suitable contractors. They can even ask their insurance company’s claims department for possible recommendations in order to have a selection to choose from.
Before any renovation project commences, it is imperative that the homeowner checks whether the contractor they are going to hire belongs to a licensed firm that is properly bonded and insured, to avoid financial costs in the long term. Homeowners have the right to request to see the contractor’s confirmation of insurance. They should ensure that the limit is sufficient to replace the house should damage to the home or destruction of the home occur during the project.
A good contractor should have technical, business and interpersonal skills added to the tools and experience needed to perform a satisfactory job. Therefore, it is best for a homeowner to hire a contractor who has experience with similar projects to the one that needs to be completed. This will best ensure that the contractor is familiar with the materials and techniques needed, as well as know how to solve any problems that may arise.
Warning bells consumers should look out for when selecting a contractor include a contractor who does not have a physical address; does not want a written contract; or offers discount for cash payments. These are signs of an underground transaction, which may present many risks to the homeowner and probably means that the contractor is unlicensed and/or uninsured. Without a written contract, the homeowner is unprotected — if the need for an insurance claim arises due to damages caused to the home, the chances are good that the claim will be rejected as there is no written paperwork or the contractor is unlicensed.
During any renovation project it is also important to makes sure the workers follow some basic rules to best avoid fire damage. Firstly, after the completion of any paint job all rags, towels or drop clothes with paint, stain or oil-based solvents on them must be properly disposed of, as they increase the risk of fires. It is also advisable to insist that no smoking of cigarettes takes place during the construction job and that a fire extinguisher is always present.
Should the project require the use of a blowtorch, ask the contractors to install a heat shield near any combustible materials and remove any flammable materials or liquids from the work area. Homeowners can also ask the contractors to look out for any possible fires that may have started before they leave the premises each day by scanning the property for smouldering materials or hidden hot spots.
The chances of water damage occurring in the home during a construction project also increases due to the vibrations of building equipment or poor workmanship which can result in burst or leaking pipes. If any walls or roofs are left open during the project, wind-driven rain can sometimes seep through plastic protective tarps or temporary plywood. Therefore, it is best to check for any water damage on a daily basis to ensure it can be quickly identified and damage can be kept to a minimum.
It is vital to remember that most insurance policies require the homeowner to inform their insurance provider if home renovations are undertaken and that the standard building and contents policy will not respond to claims as a result of home renovations. Informing the insurance provider in writing of the renovations also ensures that the policy can be updated according to the new value of the home after the alterations.
By giving thought to these important insurance considerations ahead of any home construction or renovation project, one can save the hassle of any financial repercussions while also ensuring that a newly renovated home will provide years of pleasure.