It’s finally time to renovate your kitchen and you’re ready to knock a hole in the wall, rip out the old cupboards and build the kitchen of your dreams. But before you call up a contractor, consider how these renovations will affect your insurance needs, both during and after renovations.
Nolwazi Nzama, Head of Affordable Housing at Standard Bank shares 5 things to consider when it comes to home insurance for renovations:
- Homeowner’s insurance covers the building materials that will pile up before you begin work. If a fire struck and destroyed both your home and the building materials, you might not be covered for the full extent of the damages unless you have informed the insurance company that you were building.
- If you hire a contractor, ask him if he has adequate insurance coverage for his workers before the work begins. He should provide proof of insurance in the form of a ‘certificate of coverage’ in case his workers get hurt on the job. If a worker is injured in your home and the contractor does not carry workers’ compensation, you could be sued and your insurance will not cover this cost.
- Contractors’ liability insurance covers the contractor for damage to your property during renovations. If, for example, there’s a big hole in an outside wall and the contractor fails to cover it properly during a rainstorm, water could leak in and cause major damage. Though homeowner’s insurance will cover these damages, your insurance company will expect the contractor’s insurance company to pick up the tab if you make such a claim.
- For those who would prefer to do renovations themselves, the insurance requirements depend on who’s helping you and whether you are paying them for their help. A friend or family member who’s injured while lending a hand can have his or her medical bills covered by your homeowner’s policy. However, hiring a subcontractor or paying someone to help you makes you an employer, which means you must purchase workers’ compensation (workers’ insurance) to cover you in case someone gets hurt on your property.
- Know who is responsible for uninstalled appliances and other items, such as carpets and cabinets, in advance. Your contractor’s insurance should cover these items.
It’s important to note that very few contractors have contractors’ liability insurance or workers’ compensation, so you need to get as much coverage from your own insurance company as possible before you start with any renovations.
“While it might be cheaper to use the guy referred by a friend of a friend, getting a reputable and accredited builder will protect customers in the long run and ensure their asset is still of the right and insurable quality, reducing the risk of repudiated claims,” concludes Ms Nzama.