Personal Insurance

Unforeseen Insurance Expenses during Home Renovations

By January 29, 2018 February 14th, 2018 No Comments

Skip the unforeseen expenses during home renovations before they happen. Collaborate with your trusted advisor.

Most clients do not think to contact their insurance advisor when they are considering additions, alterations, or renovations to their property. This is especially true when updating, replacing, or finishing the existing square footage.

Imagine their surprise when they find out their policy deductible of $10,000 is now a $50,000 deductible because the loss occurred while their home was under renovation and their advisor and insurance company were unaware.  A special construction deductible, usually a percentage, applies to any covered loss that occurs during construction or renovation that meets certain criteria.

The construction or renovation deductible most often applies when you are constructing new structures, if you have temporarily vacated your home during renovation, or once your project cost exceeds a percentage of your dwelling or other structures. For example, constructing a brand new pool house or a $100,000 kitchen renovation for a $1M home could result in an application of a 5% or 10% deductible of dwelling coverage.

The good news is that if you engage your insurance advisor prior to commencing construction, you can likely not only have the construction deductible waived, but you can take advantage of complimentary loss prevention services offered by your advisor and insurance company. An on-site walk through with both your contractor and insurance company may prevent losses from fire, water, and theft, which can severely damage your entire property and significantly affect your timeline.  Your risk manager can also ensure that the construction is to current code and includes the most current industry best practices to prevent the risk of construction defects.

Please contact your trusted insurance advisor at Evarts Tremaine prior to beginning any renovation or construction at your property and be sure to read your insurance contract in its entirety for exclusions, changes to coverage, loss settlement, and special deductibles.