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If a contractor damages my home, whose insurance covers it?



Homeowners insurance is designed to provide you with financial protection against loss due to theft, disasters and accidents. But what if an entrepreneur causes damage to your home? In this case, your homeowner can insure you to cover the cost of repairs, but will likely be reimbursed by 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 can help pay to repair the damage and then continue compensation from the contractor's insurance company.

Before starting any work on your home, it is important to ensure that the contractor has adequate insurance coverage. Ask to review a copy of the contractor's policies and make sure they include commercial liability insurance and employee compensation. If the contractor does not want or can not provide an insurance verification, hire someone else.

Damage to your home from poor performance by contractors

When you hire a contractor to work in your home, you naturally hope that the work will be of the highest quality. Unfortunately, contractors have been known to perform fuzzy work or use defective materials.

Your homeowners insurance does not cover bad workmanship per se, but it can cover damages that occur. For example, if an electrician installs faulty wiring that causes a fire, your homeowner's policy will likely cover damage caused by the fire, but not the cost of repairing or reinstalling the wiring. For that, you need to turn to the contractor to do it right. The same principle would apply if a plumber did a bad job that resulted in a water leak that caused damage to your home. Your insurance would probably cover the water damage, but not the cost of plumbing repairs.

Adjust coverage for additions or renovations

Each insurance has limitations. Normally, your homeowner limits should cover the cost of repairing damage to your home or rebuilding it completely at current rates of the same quality. These costs can be higher if you renovate or add to your home.

Your existing coverage may not automatically extend to a newly built extension, so you may need to make changes to your policy if you choose to add. Insurance "Housing under construction" or "renovation" can also be added to your insurance for homeowners to cover you in the event of a basic collapse, damage to building materials or theft of building materials.

Professional Insurance Advice

Before you get contractors to start working in your home, meet our experienced agent. We can review your homeowner's insurance policy and help you ensure you have the right coverage to protect you in the event of the worst happening. We can also give you advice on what to look for when reviewing a contractor's insurance policies.


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