Homeowners Insurance: Get it in Writing

By Compuquotes Team on October 16th, 2009

Homeowners Insurance

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 accidentally 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.

Does Your Homeowners Insurance Cover a Contractor?

You have a contractor working on your home and there's a fire, which may have been accidentally started by the contractor or his workers. No problem, you're covered by homeowners insurance, right? Don't assume so. It's possible that your policy does not cover you for damage to your property caused by someone else. You could be responsible for a very large, very unexpected repair bill.

Not All Homeowners Insurance Policies Are the Same

Homeowners policies are not like auto insurance policies, with standard provisions. They can vary in what they cover, as well as in the level of coverage that they provide. Homeowners insurance policies often specifically list what they will--and won't--cover. However, if the damage is due to a peril not named, such as damage caused by a contractor, you may not be covered. Due to the costly nature of claims, it's always best to find out exactly what your policy covers before you need the coverage.

Find Out What Your Policy Covers

The best way to protect yourself when hiring a contractor is to read your insurance policy carefully before the work starts. If you don't see a provision that relates to damage caused by others working on your house, call your insurance company. Give as much information as possible about the type of work you are contemplating, the name of the contractor, and any other relevant information.

If you're told that you are covered, make sure you find out where in your policy it is specifically stated or else have your company send you a written description of the coverage. Also, make sure that the monetary limits of your coverage are high enough to cover any possible claims.

Get Extra Insurance if You Need It

If you find out that your policy doesn't cover work done in your home by a contractor, you should either update your current policy to include it or purchase a specific policy that does. Make sure you get a written description of the new coverage and read it thoroughly to be sure that it adds the coverage you specifically requested, with a high enough monetary limit to cover possible claims. An extra "umbrella" policy, which you can add to your current policy, may also be available to cover you for the specific time period the contractor is working on your home.

Follow Up

If the work you are having done to your house substantially increases its value--adding another room, for example--let your insurance company know. You may want to increase the limits of your homeowners policy to reflect the added value to your property.

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