Saturday, August 6 2022

Brokers are increasingly taking on the role of advisor for their clients, and one area that certainly benefits from professional advice is home improvement. The first question to be determined is whether or not the customer’s proposed changes fall under the renovation header, said Nathan Tjandrawinata, assistant vice president, personal insurance at Cansure.

“There is a gray line between renovations and the course of construction,” Tjandrawinata said, noting that insurance companies have different guidelines but most differ in the cost of the project.

“It goes for $ 50,000, and I saw $ 100,000 as a limit. A good indication would be the scope of the project – cosmetic only, versus structure. Most often, if only cosmetic, this would fall under renovations.

Whether it is a full addition or limited changes, it is essential that the broker is up to date on the plan and ensures that client coverage is adequate. Renovations can result in new items that add risk, such as a fireplace or swimming pool, or could change the cost of replacing the home. It is also not uncommon for renovations to actually reduce the risk of future claims and therefore lower rates: for example, modernizing windows, doors or the roof that protects against the risk of weather damage.

Regardless of the scope of the renovations, it goes without saying that all work must be done “in accordance with city regulations and the appropriate permits must be obtained for the project, if applicable,” Tjandrawinata said.

“Another consideration is that most insurance companies require that plumbing and electrical work be done by qualified subcontractors,” he added.

Ultimately, brokers should keep in mind that home renovations and updates can vary exactly to the extent that they alter the existing risks covered by a homeowner’s policy. It is important to get a complete picture of the client on the extent of the renovations in order to provide proactive advice as well as comprehensive coverage in the event of a loss.


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