Keeping You Covered
Home Restoration and Insurance Claims
For many of us, the idea of dealing with the insurance company is about as pleasant as going to the dentist for root canal. While few enjoy anything to do with the process of making insurance claims for damage to our homes, the alternatives of waiting too long before contacting our insurer can result in an even bigger headache.
For a homeowner to assume he or she is fully covered in the event of damage caused by fire, water, wind, or even a careless contractor is not only foolish, but it is also downright irresponsible.
In the event of a disaster, insurance companies will send out contractors they have appointed to do restoration work after it has been professionally assessed to determine the extent of damages. What many homeowners do not realize is these contractors are there to make damaged areas appear as they did before the incident; in other words, their purpose is to restore, not to improve.
In some instances, this is problematic, as the quality of the contractor’s work may not always be up to par. After all, plumbers, drywallers, and other trades are working on behalf of the insurance company and not the property owner, as would be the case with a homeowner seeking out his or her own contractor. This is why it is important for homeowners to speak up to their insurance company if they believe work is not being done satisfactorily.
In some instances, such as during the devastating wildfires which tore through Fort McMurray in Alberta in May 2016, it can take weeks or longer for damage to homes and property to be addressed, much to the frustration of owners. Many residents had to be evacuated because of the fires, and the Insurance Bureau of Canada helped advise them on what to do when they returned to their homes and how to initiate the restoration process. This included taking plenty of photos, keeping receipts of anything they purchased relating to the cleanup, and contacting their insurance company as soon as possible to make their houses liveable again.
Unfortunately, since we also live in an age of fraudsters, affected homeowners were also advised against dealing with unscrupulous door-to-door contractors promising quick fixes at a drastically reduced price – and asking for money in advance. What often happens in these cases is work is not delivered, and the so-called contractors disappear, never to be seen again.
All home damage brings its own unique set of challenges. Fire, for example, may not only burn wooden frames and walls, but the resultant smoke damage – although it is sometimes invisible to the naked eye – can penetrate and destroy items in the house, such as valuable electronics, leaving them beyond repair. Likewise, water damage, if left untreated, can utterly devastate a property. Steel beams will rust, wiring corrode, wood rot, and worst of all, mould will grow behind drywall, which can make a house unliveable, bringing with it a host of health problems from rashes to nasal congestion, difficulty breathing, and chronic headaches.
Instead of waiting, it is advisable for homeowners to contact their insurance company as soon as disaster strikes to spare themselves considerable worry and trouble in the event something goes wrong during a restoration. Even regular renovations, such as a new kitchen or bathroom, can put an insurance policy at risk if handled improperly.
Most owners are not aware that if they vacate their home for a certain amount of time during a renovation, and leave it empty for more than thirty days, they may not be covered, as it violates their policy; this can be avoided by paying extra for a vacancy permit.
There are other questions to ask. Does the contractor have his or her own insurance? What happens in the event of damage incurred as a result of a builder leaving a door open and the house being ransacked? Who pays in that case? What if a pipe bursts in the upstairs bathroom, with water flooding through the ceiling, damaging it and hardwood floors below? If this is a result of shoddy workmanship or negligence, it is likely an insurance claim will be denied. Unless we are in the industry, few of us actually read the many pages of our home insurance policies.
When it comes to home restorations, renovations, and insurance companies, vigilance is critical. While dealing with insurers may seem an unpleasant task, it need not be difficult or overly complicated if it is done well ahead of the restoration project, or as soon as possible after a fire, flood, or other disaster. While coverage and conditions can vary, most insurance companies will want to know if the house is or will be unoccupied during the renovation, and if the contractor has his or her own liability insurance, which must be up-to-date and sufficient for the work being undertaken. Even if a home handyperson decides to take on the work themselves, insurance companies must still be notified to guarantee they are still covering the home during the duration of the project.
Aside from the obvious benefits of renovation for the homeowner, there are other perks. In some cases, updating old wiring such as knob-and-tube – commonly used across the United States and Canada in homes and buildings up until the 1930s – or installing a brand-new roof can actually result in insurance premiums being reduced. Conversely, higher-end renovations, such as the installation of marble countertops, can see premiums increase, since they are more expensive to replace in the event of damage.
During the lifetime of a home, it is not unusual for owners to live through several renovation, remodelling, or unfortunately, restoration projects, some of them major, like 2012’s Hurricane Sandy, which ended up being the second-costliest hurricane in American history. Whether a renovation is planned or a restoration taken on out of necessity, reviewing one’s homeowner insurance policy to determine the extent of coverage is a must.
Additionally, it is vital to ask general contractors (GC) if their trades, such as plumbers and electricians, also carry insurance, and if they are bonded. This is extremely important in the event of a contractor being unable to complete the work due to factors such as illness, accident, or even bankruptcy; very few homeowners are more concerned about the price of work than actually seeing a contractors’ certificate of insurance.
Another issue when dealing with contractors is general liability (GL) coverage. Accidents due to negligence can and do happen. In the event that a hammer carelessly left on a ladder falls and hits a worker on the head, does the general contractor have sufficient liability coverage? Contractors and their trades often transport tools and equipment worth thousands of dollars, and while theft is unpleasant, it is often a reality on construction sites, particularly if tools are left unattended for any length of time. If a truck or van full of expensive drills, saws, jackhammers, electrical and other tools is stolen or if equipment such as a backhoe is vandalized, whose insurance covers the damage or theft?
Another area homeowners often do not consider: what happens if there are issues after the work is completed? Unfortunately, shoddy work only becomes apparent weeks or sometimes months later, often when weather conditions change. Improperly insulated pipes in outside walls are one thing in spring and summer, and something else in winter when temperatures plunge, and they freeze and burst. If this happens, homeowners need to ensure their general contractor will not only come back to replace cracked sections of pipe, but take on other tasks as a result of the damage, such as installing new drywall, painting, and fixing other affected areas.
With coverage varying from state to state in the US, and province to territory in Canada, it is equally important for homeowners to speak with their insurance broker after a renovation job, or restoration work is completed. After all, our homes are our castles, and insurance is in place to protect us now and into the future.