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Remodelling your house? Take home insurance into consideration

Planning to remodel your house? Moving or remodelling is a huge task. One needs to take into account a lot more factors than the furniture and flooring.

A growing number of people have finally started realising the need to protect their dream homes and contents from natural disasters and other perils.
If you already have an insurance policy, then you should get the policy terms checked in order to know if the existing one covers the cost of remodelling or not.

Planning to remodel your house? Moving or remodelling is a huge task. One needs to take into account a lot more factors than the furniture and flooring. Often people make a decision to revamp their house in haste and forget the most important thing — home insurance. For many, it may seem to be irrelevant as they are unaware of the features a home insurance policy can offer. Yes, a home insurance policy can cover house remodelling facility too. But before you opt for one or start with the remodelling process, you should keep certain things in mind:

Contact your home insurance broker
The first and foremost task should be to consult the insurance broker or agent. They can give the best advice possible. If you already have an insurance policy, then you should get the policy terms checked in order to know if the existing one covers the cost of remodelling or not. However, if it doesn’t, then there are two options. Either one can upgrade the policy and add the remodelling cover or buy a new one which can be maintained simultaneously with the existing one. Also, if you have taken a loan on the house you are about to remodel or the house is bought by taking a home loan, the insurance policy terms alter accordingly.

As the house gets remodelled, the value of the property too increases which can affect the insurance policy value too. Thus, one should keep all such factors in mind while consulting the broker.

What all does the policy cover under remodelling?
Even if the policy covers the cost of remodelling, there are terms further demarcating the areas and factors it will consider. For example, the cost of moving truck, the cost of the rented house one shifts to till the house is getting revamped. All such factors play a major role while deciding upon a policy. So, before starting the remodelling work, an insurance agent should be contacted and consulted. As a homeowner you should also review your policy limits. Also, if some mishap occurs while construction, how much will the policy cover? Are your bodily injury and property damage coverage high enough to cover the risks from your remodelling project?

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Deciding on a contractor:
The next step in the process is hiring the contractor. For the sole purpose or remodelling, there are many contractors available in the market. Following are a few points to keep in mind while hiring a contractor:

License of the contractor:
While it’s good to check the licence of the contractor, you should also check the authenticity of it.

General Liability
Another aspect is the liability policy of the contractor. This ensures you’re fully covered against liability for damage that can occur while remodelling. For example, if workers break a water line that causes a neighbor’s property to flood, it should be covered under the liability policy of the contractor.

Worker’s Compensation
If an employee or sub-contractor gets injured on the job site, this covers medical/ rehabilitation expenses and lost wages for the worker.

Builder’s Risk
One should also check if the policy covers damages done to your home and materials, including materials that haven’t been installed yet while remodelling.

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Thus, these are some major factors to consider before or while getting the house remodelled. However, you should be totally involved during the purchase of the insurance coverage to insure that nothing goes wrong on either part. You can also take part in the purchase of the builder’s risk policy as the homeowner, as it gives a better sense of what all is covered and what’s not.

Alternatively, if you are planning to get your house revamped on your own, without hiring a contractor, then the policy terms and features will not be the same.

(The author is CEO & Founder, PolicyX.com)

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