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If A Contractor Damages My Home, Whose Insurance Covers It?
Homeowners insurance is designed to provide you with financial protection from loss due to theft, disasters, and accidents. But what happens if a contractor causes damage to your home? In this case, your homeowners insurance may help cover the cost of repairs, but will likely seek reimbursement through the contractor’s general liability insurance.
Damage to Your Home From an Accident Caused by a Contractor
Although many contractors are reliable, some have been known to cause house fires and other accidents that cause damage to a property. If this happens to you, your homeowners insurance may help pay for repairing the damage, then pursue reimbursement from the contractor’s insurance company.
Before any work is begun on your home, it is important to ensure the contractor has adequate insurance coverage. Ask to review a copy of the contractor’s policies and make sure they include commercial general liability insurance and workers’ compensation. If the contractor is unwilling or unable to provide verification of insurance, hire someone else.
Damage to Your Home From Poor Contractor Workmanship
Naturally, when you hire a contractor to work on your home, you hope the workmanship will be of the highest quality. Unfortunately, contractors have been known to perform shoddy work or use defective materials.
Your homeowners insurance will not cover poor workmanship in itself, but it may cover resulting damage. For example, if an electrician installs faulty wiring that causes a fire, your homeowners policy will likely cover the damage caused by the fire, but not the cost of repairing or reinstalling the wiring. For that, you would need to turn to the contractor to make it right. The same principle would apply if a plumber did a poor job that resulted in a water leak that caused damage to your home. Your insurance would likely cover the water damage, but not the cost of plumbing repairs.
Adjusting Your Coverage for Additions or Renovations
Every insurance policy has limits. Typically, your homeowners policy limits should cover the cost of repairing damage to your home or rebuilding it completely at current prices with equal quality. These costs may be higher if you are renovating or adding onto your home.
Your existing coverage may not extend automatically to a newly built addition, so you may need to make changes to your policy if you decide to add on. “Dwelling under construction” or “renovation” insurance can also be added to your homeowners insurance policy to cover you in case of a foundation collapse, damage to building materials, or theft of building materials.
Professional Insurance Advice
Before you have contractors begin work on your home, meet with our experienced agent. We can review your homeowners insurance policy and help you ensure you have the right coverage to protect you in case the worst should happen. We can also advise you on what to look for when reviewing a contractor’s insurance policies.