Insuring Your Vt Renovation

Renovating a house in Vermont? It's crucial to understand the ins and outs of insurance to protect yourself and your property. Home renovation projects come with a unique set of risks, and ensuring you have the right coverage can provide peace of mind and financial security. From accidents and injuries to property damage and theft, there are many potential pitfalls that the right insurance policy can help you navigate.

Notify your insurance company before renovations begin

Renovating your home in Vermont? It's important to notify your insurance company before any building works or home renovations begin. Here are some reasons why:

Avoid Being Underinsured

Failing to inform your insurance provider about upcoming renovations could leave you underinsured. If something unexpected happens during the renovation period, such as a fire or flood, you want to ensure you have adequate coverage. For example, if you're installing high-end appliances or adding a room, you may need to increase your coverage limits.

Understand What's Covered and What's Not

Before renovations begin, review your homeowners policy to understand what's covered and what's not. Most home insurance policies provide some protection if your home is damaged during renovations, but it's crucial to confirm this with your insurance agent. You don't want to assume you're covered only to find out later that you're not.

Adjust Your Coverage as Needed

If your renovation includes adding valuable items, such as expensive light fixtures or a new entertainment system, you may need to adjust your coverage limits. Additionally, if your renovation increases the cost of rebuilding your home, you'll likely need to increase your "dwelling coverage."

Prevent Issues with Unoccupied Homes

If your renovation requires you to move out temporarily, your home may be considered unoccupied by your insurance company. Unoccupied homes typically have different terms and conditions, and there may be requirements you need to meet, such as securing the property against intruders or arranging for regular visits.

Take Advantage of Discount Opportunities

Some insurance companies offer discounts for certain renovations. For example, if you upgrade your electrical, plumbing, or heating system, your insurance company may reduce your premiums as these improvements can lower the risk of fire or water damage.

Ensure Your Contractor Has Adequate Insurance

If you're hiring a contractor, confirm that they have the necessary insurance coverage, including personal liability, workers' compensation, and property damage coverage. Ask to see their certificate of insurance and don't hesitate to look for another contractor if they can't provide proof of insurance.

In summary, notifying your insurance company before starting any renovations is crucial to ensure you have the right coverage and avoid potential issues. It's also an opportunity to discuss any additional coverage you may need and explore potential discounts.

Check if your current policy covers renovations

Before starting any renovation work, it is important to check if your current insurance policy covers the work you are planning to undertake. Renovation insurance is not a product offered by all insurance companies, so you may need to look into other options.

The extent of coverage during a renovation may differ between insurers. Some insurers may require you to pay more on your policy, including a higher excess or a higher premium. In some cases, they might refuse or reduce a claim or even cancel the policy if it is no longer insurable. Therefore, it is crucial to read your policy document carefully to understand what you are covered for and any limits and exclusions that apply.

If you are planning a small DIY project, the same terms usually apply as if you hired a professional. This means that your home insurance policy probably won't cover damages caused by the work being done. However, it may cover contents for reno-related accidents, such as smashing a TV or spilling wine on the carpet, as long as the modifications are minor and do not alter the structure of your home.

For larger projects, tradies' insurance, also known as builders' or contractors' insurance, may provide some cover. Before starting any renovation work, ask your tradesperson what their insurance covers. If they only have partial cover, it could be worth negotiating to upgrade their coverage to include your whole home.

It is also important to note that most insurers will have an unoccupied excess that applies to any claim made on a home that has been unoccupied for more than 60 consecutive days. If you plan to live elsewhere during the renovation, keep this in mind and try to reduce the time you need to be away from home.

Consider additional coverage during renovations

Renovating your home is an exciting time, but it's important to make sure you have the right insurance coverage in place to protect yourself financially. While your existing homeowners insurance policy may cover some renovations, any significant updates and upgrades could leave you underinsured during and after the work. Here are some additional coverages to consider during your renovation:

• Increase liability coverage: Your existing liability limits may not be sufficient if someone gets hurt during the renovation. Increasing your liability coverage limits will provide additional protection in case of accidents or injuries.
• Verify contractor insurance: If you hire a contractor, verify that they have adequate liability insurance and workers' compensation coverage. This will protect you in case the contractor or their workers are injured on the job and try to sue you.
• Dwelling under renovation coverage: Consider adding dwelling under renovation insurance to protect your building materials at or en route to your property. This type of coverage also provides protection in case of foundation collapse.
• Vacant home insurance: If you need to live elsewhere during the renovation, consider purchasing vacant home insurance if you'll be away for more than 60 days. This will protect you in case of damage or incidents that go unnoticed for a while.
• Personal property coverage: If you're adding any expensive items or upgrades, such as high-end appliances or a jacuzzi, you may need to increase your personal property coverage limits.
• Umbrella insurance: Separately purchased umbrella insurance can provide additional liability coverage if the coverage of your homeowners policy is maxed out. This can be a temporary or permanent solution.

Remember to review your policy and speak with your insurance agent before starting any renovation work to ensure you have the appropriate coverage in place.

Update your policy after renovations are complete

Renovations can change a lot about your home – square footage, features, and, of most concern to insurers, replacement value. So, it's important to update your insurance policy after renovations are complete. Here are some reasons why:

Replacement value

The replacement value of your home is directly tied to its market value. If your renovation changes your home's value, you'll need to adjust your insurance coverage. For example, if your house is worth $400,000 and you do an extensive bathroom renovation that increases the room's size and uses higher-quality materials, your house may now be worth $440,000, which increases the rebuilding cost if there is an accident.

Uncovered damages

If you don't update your insurance policy after your renovation and need to file a claim, it could be denied or not be fully covered. Most policies state that a renovation project will invalidate your coverage if you fail to notify your provider of any updates or changes to your home.

Liability

There is always a chance that a worker could be injured while performing work on your home, and you may be liable. Depending on the situation, your insurance policy may or may not cover the costs. It's important to review your policy and ensure you have adequate coverage.

Vacancy

If you had to vacate your home during the renovation for an extended period, you may have broken a common policy rule that requires you to occupy the home while the agreement is active. You can avoid this by requesting a vacancy permit from your insurer.

Burglary

With all the people coming and going, potential entry points due to the renovation, and more people with access, burglary is a possibility.

Unforeseen issues

Renovations can be unpredictable, especially if you are renovating an older home. You may find dated wiring, old plumbing, and other issues that need to be updated to maintain your coverage. It's important to address these issues and adjust your insurance policy accordingly.

Peace of mind

Updating your insurance policy after renovations are complete will give you peace of mind, knowing that you have adequate coverage in case of an accident, damage, or loss.

Review your insurance options if your home will be unoccupied during renovations

If you're planning renovations that will leave your home unoccupied, it's crucial to review your insurance options to ensure adequate protection. Here are some essential considerations:

Understand the Risks of an Unoccupied Home

Unoccupied homes are more vulnerable to various risks, including fire, theft, water damage, leaks, break-ins, and vandalism. These risks can lead to higher insurance costs, even if you choose unoccupied property insurance.

Notify Your Insurer

It is imperative to inform your insurance provider before starting any renovation work or leaving your home unoccupied. Failure to do so may result in reduced coverage or refusal of claims. Be transparent about the nature, scope, and duration of the project.

Review Your Current Policy

Before making any decisions, carefully review your existing home insurance policy. Understand the extent of your coverage during renovations, as it may differ between insurers. Some policies may require additional coverage for unoccupied homes or specific renovation projects.

Consider Renovation Insurance

If your renovation project is extensive, involving structural changes or a high budget, consider renovation insurance. This type of insurance can protect your existing structure and the ongoing work against loss or damage. It can also cover building materials and any liability issues arising from the project.

Explore Unoccupied Property Insurance

If your renovation project does not warrant renovation insurance, unoccupied property insurance might be a suitable alternative. This type of insurance can offer more flexibility, such as short-term policies, and may be more affordable than renovation insurance. However, it's important to note that unoccupied properties are still considered higher risk, leading to potentially higher costs.

Secure Your Property

Whether you choose renovation insurance or unoccupied property insurance, take steps to secure your property. This includes measures such as setting up a security fence, keeping the lights on, regularly collecting mail, and storing valuables off-site or in a secure container.

Plan Your Absence

If possible, try to minimise the time you need to be away from home. Work with your builder to plan multiple short absences instead of one long absence to avoid triggering unoccupied excess clauses in your insurance policy. Most insurers consider a home unoccupied if it hasn't been occupied overnight for 30 to 60 consecutive days.

Frequently asked questions