Understanding the nuances of the many different types insurance policies is our job, not yours. One of the most common scenarios we hear from our clients is the excitement regarding an upcoming renovation project. Often times, the project, although it may seem minor will require a special insurance policy to adequately protect the home and homeowner.
A standard homeowner’s policy is a form of insurance designed to protect an individual’s home against damages to the existing structure, personal property and liability against accidents occurring in the home or on the property. A Builder’s Risk insurance policy is a form of property coverage that protects an owner’s insurable interest in materials, fixtures and or equipment to be installed during the construction or renovation of a structure. A builder’s risk policy can be written to only insure the renovated portion of the structure or to cover both the existing structure and the renovated portion.
It is important to insure your home against the present exposure to avoid a denied claim or a cancelled policy. Homeowner’s policies will not provide adequate protection against the exposures associated with a renovation, nor are they designed to cover this type of risk. A homeowner’s insurance carrier could cancel your policy if a renovation is discovered to be on going, but what is more frightening is the likelihood of a denied claim.
Not all builder’s risk policies are alike. It is important that you have a discussion with your agent about the scope of the project, timeline, and costs. Your agent at Galt Insurance Group will work to match your home renovation project with the policy best suited to protect it. We look forward to hearing about your renovation plans!