Renovating Your Home or Business? Important Insurance Considerations

Renovating Your Home or Business? Important Insurance Considerations

Renovating your home can be a great way to add value, make your home a more pleasant place to live and even save money in the long term. Unfortunately, however, we’ve all heard about the headaches that come when a remodelling project goes wrong. If you want to avoid those potential difficulties, it pays to do some prep work – including checking in to your home insurance.

Ready to Renovate? Popular Reasons to Consider Home Renovations

There are plenty of good reasons to consider home renovations, from the financial to the fun. If done well, renovations can increase your home’s value and attractiveness, and can even result in a safer, more secure and efficient domestic abode.

  • In older homes, updating to energy efficient doors and windows can be a real money-saver in the long run.
  • Many homeowners also renovate to add space, whether for an office, a rec room, or a new addition to the family.
  • And if you are planning to sell in the near future, it won’t hurt to make sure your home is looking its absolute best. Just be sure to do some research so you get the best return on your renovation investment.

Simple Insurance Steps to Protect Your Assets

Before you move forward with a project, there are a few important steps to take to make sure that you’re protected with the right home insurance. Review your policy, or better yet, call us to find out whether you’ll need to make any changes in your policy limits etc.

  • Course of Construction insurance, also commonly known as “Builders Risk insurance,” provides coverage against repair or replacement costs, along with the cost of materials, while your home is under construction. This coverage also usually includes fixtures and appliances that are projected to become an essential part of the completed structure, should anything go wrong. Remember, the amount of coverage should reflect the value of the work being done, and should extend some time after construction is complete.
  • When shopping for insurance, it’s important to remember the difference between the market value and replacement cost of your home. The market value of your home fluctuates with the housing market, supply & demand, the local economy, job market etc.  It is best described as the price a buyer is willing to pay for your home including the value of the lot. A home’s replacement cost is calculated upon what the total expenses would be if a builder would have to reconstruct the home from its current damaged state. Home insurance in Calgary – and Alberta – is based upon replacement cost, and is not necessarily reflective of its market value. 

Making Sure Your Contractor Has the Necessary Insurance

In addition to making sure that your own insurance is in order, you’ll want to check carefully to make sure that any contractor you hire has all of the coverage they need as well. If something does go wrong, you don’t want to be hit with a big repair bill for a problem that you didn’t cause. So take the time to verify your contractor’s insurance:

  • General Liability – If a contractor doesn’t have General Liability coverage, it’s best to find another option. General Liability covers both property damage and bodily injury, so it’s an absolute must-have.
  • License Bonds – Depending on where you live, there may be additional provincial insurance requirements, known as license bonds or permit bonds, for people in construction-related trades.
  • Contractor’s Equipment and Builder’s Risk – Your contractor can also purchase builders risk insurance, to protect their own tools and equipment.

Bow Valley Insurance Brokers of Calgary – Covering Alberta

Protect yourself from unnecessary risk by verifying your contractor’s insurance, and carefully scrutinizing the construction contract before you sign it. Even if you know and trust the contractor, it’s worth taking the simple steps necessary to protect your investment, and your home.

Our team at Bow Valley Insurance is here to help with your home insurance and renovations insurance in Calgary. Get started with our detailed home evaluation tool, or shop with a free home insurance quote from our team.