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Building Alterations – Are You Insured?

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So you’re taking a ‘staycation’ this year, because you have DIY projects you want to do at home. You’re going to rip our those kitchen cupboards, or retile the bathroom, and you’re raring to go. But did you know it could affect your building insurance? 
Most home insurance policies require that you insure your home to at least 80% of its replacement value. At least a quarter of renovations raise a home’s value more than 20% - so you may need to increase your homeowner’s policy value to reflect the change. Because if you don’t have you have a fire or some other disaster, you’ll be footing the shortfall. 
Also remember that your homeowners insurance covers the building materials that are on the property. So if there’s a fire and they are destroyed, you’ll need to ensure their value is provided for. 
But it’s not just your home’s higher value that you need to take into account. Whether you are doing the job yourself, or hiring a contractor is also important. If you hire a builder, you need to ask about his insurance via a ‘certificate of coverage’ for worker’s compensation and contractor’s liability coverage. 
Worker’s compensation covers injuries to the contractor and his employees while they’re doing the work, and this is important because if a worker is injured in your home and the contractor doesn’t carry worker’s compensation, you could be sued and your homeowner’s insurance might not cover that. 
Contractor’s liability insurance covers the contractor for damage to your property while it’s under construction. If there’s a big hole in an outside wall, for example, and the contractor fails to cover it properly during a rainstorm, water could leak in and cause major damage. Although homeowner’s insurance will cover these damages, your insurance company will expect the contractor’s insurance company to pick up the tab if you make such a claim. 
If you are a keen DIYer, and you’re enlisting the help of family or friends, just be aware that a friend or family member who’s injured while helping you can have his or her medical bills covered by your homeowner’s policy. But if you hire a subcontractor or pay someone to help you, you become an employer, and need to purchase workers compensation to cover your liability in the case of an injury. 
And if you’re worried about medical bills should a family member or friend be injured while helping out with renovations, a personal liability umbrella policy can pick up the bills where your home insurance policy leaves off. 
Finally, having people you don’t know working in your home can increase your risk of theft, so it makes sense to take some basic precautions: lock valuables and breakable items away, and protect electronics with dust cover sheets.

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