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Home Remodeling and Your Insurance Coverage
By David Miller
Shortly after my wife and I bought our first house, I attempted my first home improvement project. We were newlyweds, money was tight, and I thought, “I’m a college graduate. I watch ‘This Old House.’ How hard can it be?”
Our first home was a neat little bungalow, built in the 1920s. The bathroom lacked an exhaust fan, which we wisely decided should be installed by a professional. The installation, however, was proof positive of the Law of Unintended Consequences, because adding the exhaust fan necessitated the installation of a new ceiling, new electrical switches and a new electrical outlet. Installing the new electrical outlet created a hole in the plaster wall next to the sink. Patching the hole in the wall required the removal of plastic tiles around the sink, which turned into removing ALL of the tiles from the entire bathroom. This was fine until I removed the tiles near the bathtub faucet and watched in horror as a large section of the wall collapsed into the tub.
Ultimately, it took me eight months and seven arguments with my wife to complete the project. The tile work I completed around the shower was a good representation of the Ten Foot Rule in that it looked good from about 10 feet away.
The good news is that this project actually got done. Who doesn’t know of someone with a remodeling project that has been on hold for five to 10 years? Legend has it that a certain house in our area still has plywood floors from a home improvement project begun in the 1970s.
By now, you are probably asking yourself, “This is all pretty amusing, but what does this have to do with my insurance?”
The replacement cost provision of your home insurance policy can change when you remodel your home. For example, here is the contract language in the Chubb Masterpiece home insurance policy (Illinois edition):
“Your duty: It is your duty to notify your agent or broker at the beginning of, throughout, and at the completion of construction so that the amount of coverage for your house or other permanent structure can be adjusted to maintain an appropriate amount of coverage based on the construction cost information you provide. This is to reduce the possibility of being underinsured.”
If you are planning to remodel or renovate your home, please call our office before the project begins. We’ll need to know the budget for the project, the estimated time for completion, and the name and contact number of your contractor. Depending on the complexity of your project, the replacement cost provision in your policy may become more restrictive if you don’t advise us before it starts.
Shortly after my bathroom remodeling fiasco, my wife suggested that we get a new ceramic backsplash in our kitchen. We hired it out and the whole thing was done on a weekday while we were at work. My do-it-yourself days were officially over, and the world was a better place for it.