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Homeowners often mistakenly think their property insurance will cover loss during remodeling — or may assume that their contractor’s general liability policy may provide all of the needed coverage. Some property policies even have exclusions for coverage to the existing structure if renovations are taking place at the time of the loss.

Work site injuries. Damage. Vandalism. Fire. Theft. The list goes on. Many families look forward to remodeling their home, but too often the renovation process can become riskier than expected. Some of the largest losses that insurers experience occur to homes under renovation. The following is a quick list of some of the factors that arise during renovation projects that increase the risk of loss.

  • Increased foot traffic from the workers leads to a greater risk of injury on the property.
  • Luxury homes may have valuable objects inside that may be stolen.
  • Workers use tools to renovate the house that can cause damage. Some of the tools used involve flammable material, such as blowtorches, paint thinner, floor sanders, etc.
  • Unoccupied luxury homes under renovation are a target for vandalism, unauthorized use, and theft of building materials.
  • Contractors make mistakes too. If they cause damage to the home, their policy should cover the associated costs. However, there are uncontrollable factors that need to be considered, such as a canceled policy due to a missed bill.

 

Properly insuring a home while it is under renovation is a critical component of the planning process, and it is not one that should be overlooked.

There are two common ways to insure a residence under construction or major renovation: Homeowners Insurance and Builder’s Risk Policies. Each is based on specific criteria, and we strongly encourage owners and financial planners to consult with an insurance advisor who can determine the policy options to best manage potential risks.

Homeowners Insurance

Insuring projects under a Homeowners policy is often the preferred approach to managing the risks because it affords both property and liability coverage to the owner. It is critical for owners to maintain sufficient liability protection during the entire span of any renovation project. In most cases, contractors can be added as an “Additional Interest” to the policy, protecting their financial interests throughout the project while excluding them from liability coverage. However, a contractor should always maintain commercial liability and workers’ compensation insurance.

Builders Risk Insurance

Most owners and contractors involved in residential new construction projects are familiar with builders risk coverage to insure against the risk of property loss. However, builders risk insurance can provide coverage beyond new construction projects. Builders risk also provides much-needed coverage for remodeling or additions to residential structures like custom homes. Owners or contractors working on a remodeling project may not be aware that builders risk coverage is a valuable purchase to protect the structure in the event of a loss. Builders risk is designed to protect property owners, real estate developers, and general contractors who have an insurable interest in a construction project. The policies extend well beyond that of the contractor’s general liability policy – and the homeowners policy. Builders risk insures materials, equipment and fixtures being permanently installed, whether the project is new construction or remodeling.

Please contact us for additional guidance if you are planning to renovate or begin construction on a property.

Understanding what an elevation certificate is and how to read one will help you better navigate the issues a home may have in regards to flood insurance, a critical component of the home buying process. An elevation certificate (EC) is a document prepared by a land surveyor (or other licensed professional) that details the elevation of a home in reference to the Base Flood Elevation, commonly referred to as the “BFE.” The BFE is the elevation that floodwaters are estimated to have a 1 percent chance of reaching or exceeding in any given year. Remember, no type of flood damage, no matter the source of the water, is covered by standard homeowners policies.

FEMA Fact Sheet: Elevation Certificates

FEMA Elevation Certificates Instruction Guide

How an EC Is Used
If the property is in a high-risk area—a zone indicated with the letters A or V on a Flood Insurance Rate Map (FIRM)—the EC includes important information that is needed for determining a risk-based premium rate for a flood insurance policy. For example, the EC shows the location of the building, lowest floor elevation, building characteristics, and flood zone. The EC consists of six pages. Pages one through four are informational regarding the property, the Flood Insurance Rate Map (FIRM), and data pertaining to the structure. Pages five and six are photos of the property and structure. Your insurance agent will use the EC to compare your building’s elevation to the BFE shown on the map being used for rating, and determine the cost to cover your flood risk.

Section A (Page 1)
This section provides pertinent data including: the address of the property, the property description (otherwise known as the legal description), the latitude/longitude of the property, and information regarding the type of structure that is on the property such as: basement, crawl space, on slab, etc., and information regarding buildings with attached garages.

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As we continue to invest in resources to improve our clients’ experience, we are excited to announce the adoption of Indio – Gulfshore Insurance’s Secure Online Insurance Application, Document Sharing, and Document Signature Platform.

We recognize how cumbersome the insurance application process can be for most. Indio is a tool that allows us to provide clients with a fully digital application, renewal, and document signature process! This secure online platform combines all of the different functions of a typical insurance renewal process into one easy platform. Here are some of the key features and efficiencies this will bring to our insurance process:

  • Online portal allowing easy access to insurance applications/forms whenever and wherever clients need them.
  • The ability to sign all applications and forms live on the platform.
  • The ability to upload and download documents as needed in a secure environment to ensure nothing malicious is sent.
  • The ability to assign applications, forms, or even sections within applications to specific points of contact within your organization; in turn, reducing the need to print, scan, or even sign forms offline.
  • The security of knowing your data is confidential!

For more information, contact us today!

As we see time and time again, no home is completely safe from the risk of flooding. Flood insurance can be the difference between recovering or being financially devastated.  Just one inch of water in a home can cost more than $25,000 in damage—why risk it?

Do You Need Flood Insurance?

  • FACT: Homeowners and renters insurance does not typically cover flood damage.
  • FACT: More than 20% of flood claims come from properties outside high-risk flood zones.
  • FACT: Flood insurance can pay regardless of whether or not there is a Presidential Disaster Declaration.
  • FACT: Most federal disaster assistance comes in the form of low-interest disaster loans from the U.S. Small Business Administration (SBA) and you have to pay them back. FEMA offers disaster grants that don’t need to be paid back, but this amount is often much less than what is needed to recover. A claim against your flood insurance policy could, and often does, provide more funds for recovery than those you could qualify for from FEMA or the SBA — and you don’t have to pay it back.


It’s easy to see that having flood insurance provides important recovery help. The most common flood insurance is offered through the federally regulated program known as the National Flood Insurance Program (NFIP) with options for your home only or home and contents.

  • The maximum available coverage limit for the dwelling is $250,000.
  • The maximum available coverage limit for contents in your home is $100,000


What if you need more than $250,000 worth of coverage for your home or more than $100,000 of coverage for your contents?  Excess Flood insurance is available through private companies.

Federal Flood Insurance – What is Covered vs. What is Not

What Qualifies as a Flood?
Water has to cover at least 2 acres of land that’s normally dry, or has to have damaged two or more properties (one being your home). Also, the water has to come from:

  • Overflowing inland or tidal waters
  • Unusual, rapid accumulation or runoff of surface waters from any source
  • Mudflow (that’s mud carried by a flow of water, creating a river of mud)
  • You’re also covered when shorefront land collapses or sinks due to waters above “anticipated cyclical levels.”

*Water and seepage that comes from sewer or drain backups, or a sump pump that overflows is not considered a flood. Wind driven rain is not covered.

Please do not wait for an impending storm to purchase federal flood insurance. There’s usually a 30-day waiting period. Some private policies offer a 15-day waiting period.

The most significant change to the 6th Edition of the Florida Building Code is that it now requires the minimum elevation of newly constructed homes in Flood Zones A or V to be 1+ foot above the base elevation. The base elevation is the height shown on the Flood Maps as the required level to build homes, and is what flood insurance premiums are based upon. Previously, new homes were required to be built equal to the base elevation. Now, builders must add an additional foot to raise the lowest floor to at least 1’ above the base flood elevation.

This is important for all homeowners in Zones A and V to be aware of when reviewing their current Homeowner Policy. There is coverage on the Homeowner Policy entitled “Building Law or Ordinance,” which pays additional monies to bring your home up to code should you need to rebuild it in the event of major damage. Under this policy provision, homeowners can select 0%, 10%, 25%, or 50% of the dwelling coverage shown on the policy.

Should a home sustain damage equal or greater than 50% of the home’s market value, Collier County, in accordance with FEMA’s Substantial Improvement/Substantial Damage Rule, will mandate that the remaining structure be demolished and rebuilt to the current building code. As such, homeowners will likely see an increased cost to rebuild and raise the foundation a foot above base elevation per the new code. Homeowners may have chosen a low limit of “Building Law or Ordinance” coverage if their home was built recently since it met building codes. Now is the time to review the policy for proper coverage on the “Building Law or Ordinance” provision.