Who Is Responsible for Paying any Construction Mistakes in Your Home Project?
If we lived in a perfect world, construction mistakes would not exist, and nothing would go wrong when you undertook a home improvement project that entails construction. When it comes to hiring a contractor to perform construction work in your home, it’s vital that you are aware, in advance, how best to protect your investment.
Homeowner’s Insurance is Not Always Reliable
It’s never a good idea to assume that your contractor’s insurance or your homeowner’s insurance will cover any constructions mistakes in your home, as this is not always the case. To rest assured that your bases are covered should something happen during construction, there are certain things you need to know.
A homeowners insurance policy will most likely cover losses from events like a flood, but what would happen if the flood happened as a direct result of work performed by a builder or contractor?
Would you still be covered by your insurance?
Another scenario could be that you are installing a new roof, and have hired a contractor and builder. During the process, some materials are dropped on your car by accident. Or what would happen if you are remodeling your bathroom and experience waterline breakage? Do you know if your homeowner’s policy will cover it, or know if that is covered by the contractor’s liability insurance?
Being aware of the consequences of these scenarios is important, and it is something that you need to research before signing a contract or work agreement with a builder and starting the construction work.
<3>Protecting Yourself Against Construction Mistakes
Before starting any work, it’s crucial that you contact your insurance representative to see what types of events are covered when you are remodeling your home. All insurance providers have a wide array of exclusions and coverages, so you need to know what they will take responsibility for. If you have low coverage, you can always add an amendment to an existing policy, or add a rider, in which a specific project is covered, making sure you are protected during the construction phase and beyond the completion period.
Any contractor or builder that you hire also needs to be covered against any liability claims should a construction mistake arise. More than likely, any licensed contractor will need to have liability insurance before they can start a project. This insurance will protect them from defective products, accidents or shoddy workmanship.
Request to see proof of this protection, as coverage is expensive, and the contractor could be under-insured, which puts you at risk for monetary losses. Liability protection against any construction mistakes related to the contractor needs to be set in place before any construction work begins.
Your Cancellation Rights
Via the “cooling-off rule,” the Federal Trade Commission gives you three days to cancel any contract if you discover that either the contractor or yourself do not have the necessary liability coverage against construction mistakes. After the contract has been signed, you are allowed three days in which you are able to cancel the agreement without any consequences.