Homeowners Insurance: Get it in Writing

For years, you’ve been told that homeowners insurance covers your home and its contents in case something happens, such as a house fire. But what would happen if something caused that fire, such as a contractor who was hired to repair your plumbing starting a fire in your home accidentally? What if the contractor who is replacing the shingles on your roof accidently dropped a bundle on your neighbor’s car, destroying it? Most homeowners would assume that their insurance would cover these events with these circumstances; however that may not be the case at all.

Homeowners insurance is very different from auto insurance. Car insurance must have a minimum level of coverage but homeowners insurance policies are very different and can vary a great deal, even from one to another. Some homeowners insurance policies are comprehensive (inclusive of different events) while others are much more specific. Homeowners Insurance policies that are much more specific likely only cover a variety of perils that are defined in the policy itself and will exclude coverage for anything that is not listed in the policy. For this reason, many homeowners insurance policies don’t cover you against liability claims or damage done to your home that are the result of the actions of contractors who are hired to work on your home.

If you are hiring a contractor, before you allow them to begin work on your home, you need to ensure that your homeowners policy will cover contractor liability claims in the event of an accident. You can purchase this as extra protection for your home when you’ve hired contractors to do work. You need to purchase these peril-specific homeowners insurance even if the contractor is fully insured themselves.

By having this coverage, you can be certain that you are properly covered should anything happen as a result of the contractor working on your home. When you contact your insurance agent, broker or company, be sure to tell them the type of work that you are having done on your home, the name of the company or contractor who will be doing the work on your home and as much information as you can give the insurance company. Ask specifically if your homeowners insurance policy will cover perils that result from accidents or contractor errors. If your insurance contact person says your insurance policy does cover that specific peril, request that your insurance company send that to you in writing.

If you are told that your insurance policy does not cover these perils specifically, update your homeowners insurance policy to include them and have a new copy of your homeowners insurance policy sent to you in writing. Be sure to read through it directly and ensure that the coverage you wanted to add was properly included in your insurance policy. If you want to, and if it is an option with your insurance company, you can add an extra “umbrella” policy to your current homeowners insurance for a specific period of time for contractor specific perils. Once again, you should ensure that this new coverage is offered to you in writing, so that in the event something happens, you can be sure you are correctly covered.