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.
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.
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!
NAPLES, FL (June 18, 2019) – Gulfshore Insurance Inc., a leading insurance agency in Florida, has announced the addition of Private Risk Services Client Advisor, Jon White, to their staff.
With over 12 years of industry experience, White’s business and sales strategies are innovative and effective. “Jon White is an asset to our Private Risk Services division. His go-getter attitude and passion to deliver impeccable service to clients are great contributions to the team and the overall growth of our agency,” stated Brad Havemeier, President and CEO.
In his new role, White will specialize in complex lifestyle protection for successful families, including high value homes and estates, yachts, and auto collections. White will also partner with wealth advisors, trust and estate attorneys, and luxury realtors to limit his clients’ liability exposures.
About Gulfshore Insurance
Gulfshore Insurance is an insurance agency based in Naples, Florida. Founded in 1970, the agency provides professional risk management and insurance coverage to businesses and individuals. Gulfshore Insurance combines the best characteristics of local agencies with the expertise of national brokers. Their associates in Naples, Fort Myers, Fort Lauderdale, and Sarasota advise more than 10,000 clients throughout the state. To learn more, please visit www.GulfshoreInsurance.com.
Typically, insurance policies (e.g., homeowners, automobile, and watercraft) include initial limits of “primary” liability that responds to legally based judgments against you or your family members. However, these are commonly limited to $300,000 or $500,000, making them inadequate in today’s litigious society where multi-million dollar judgments are all too common: these judgments are based on current and future earnings. In that event, an Excess Liability or “Umbrella” policy kicks in when a lawsuit judgment exceeds the limit on your homeowner’s and auto policies.
A key strategy in wealth preservation is the maintenance of comprehensive personal liability protection. That’s why we urge our clients to consider the maximum net worth they are willing to risk should such lawsuits occur. Our agency has the ability to place up to $100,000,000 in personal umbrella policies, and our recommendation is to maintain Excess/Umbrella Liability protection at a minimum limit of $5,000,000.
We believe there are two key components that, whenever possible, be included in a comprehensive Excess/Umbrella policy:
Uninsured/Underinsured Motorist – This important protection is provided under most primary Automobile policies. It ensures that a household member will be covered for injuries he/she receives from a negligent driver. In the event of a qualifying accident, the insurance company will pay the difference between what the uninsured/underinsured driver can pay and what the injured driver would be entitled to as if the uninsured motorist had proper insurance in effect (covered also applies in “hit-and-run” accidents). We encourage every client to purchase additional limits of protection, which are available as an endorsement to the Excess/Umbrella policy. This additional protection covers the bodily injury damages they cause you or a family member.
Ensuring a Proper Defense – Most clients are unaware of how their defense would be managed by their insurance company in the event of a lawsuit brought against them or a family member. Three specific items to request include:
- Outside the Limits – All covered defense costs are “outside” the limit of Excess/Umbrella coverage, thus preserving the full Excess/Umbrella coverage limit for judgments against you.
- Expanded Defense – A sub-limit of coverage will apply to the reasonable expenses for your preferred law firm to review and consult on the defense offered by the policy.
- Reputational Damage – Some policies will also provide a sub-limit to cover the fees of a public relations firm to protect your reputation within your community.
Our clients’ needs evolve over time so we want to reinforce the following coverage options that could be critical to maintaining a proper Personal Liability Program. Please make your insurance advisor aware of any related exposures that you or a family member may have to any of the following:
- Trusts, Estates, & LLC’s – If your properties, vehicles, watercraft, or aircraft are owned in the name of an entity created for tax or liability purposes, be sure the entity is named on your Primary and Excess/Umbrella policies as an Additional Insured.
- Non-Profit Director’s & Officer’s Liability – Protects unpaid board members or trustees of charitable organizations against lawsuits involving a variety of wrongful acts such as sexual harassment, discrimination, libel, slander, invasion of privacy, wrongful termination, and plagiarism.
- Family Trust Liability – Covers damages resulting from a negligent act, error/omission, or breach of duty while serving as a trustee of a family trust.