One of the ways Utica area homeowners are taking advantage of our still remarkably low interest rates is by renovating their homes. They may be investing in that new dream kitchen or upgrading the old bathrooms. Maybe an addition to the back of the house. Some are looking at a new garage or shed, even a home greenhouse for year round gardening.
If you are in the middle of major renovation to your home, you might notice that the contractors leave mountains of new building materials out in the open on the lawn.
What happens if some or all of that new wood, shingles, or pipe is stolen? You’ve probably already paid for it, so will your homeowners insurance policy cover you? Or should you call us for an additional short term policy to be sure all that material is covered?
Let’s first take a look at a typical Homeowners 3 policy written in New York State. Under Coverage A – Dwelling you will find that “materials and supplies located on or adjacent to the residence premises for use in the construction, alteration or repair of the dwelling or other structures on the residence premises” is covered. Notice that “other structures” such as garages and sheds are included in the coverage.
The upshot: just because the building materials are not part of any building yet, they are still covered under the Homeowners Policy. The next question is, what are these building materials covered for? The answer is, basically, all losses except what is excluded.
The usual exclusions in the homeowner policy also apply to building materials on the premises. Flood, earthquake, any earth movement, water damage, neglect, war, nuclear hazard, and intentional losses are all excluded.
But are there any particular exclusions for building materials on the premises? It turns out that there is one, but it won’t apply to most people. There is a section in the exclusions that says, “Loss caused by theft in or to a dwelling under construction, or of materials and supplies for use in the construction until the dwelling is completed and occupied.”
What does this mean? Your homeowners policy will cover stolen building materials if you occupy your home. Therefore, if you’re constructing an addition or renovating your home or outbuilding, you’re OK because you already live in it.
This also applies to contents that may be considered building supplies. They are not covered for theft until, or unless, you occupy your dwelling. So, give us a call if you are building brand new and are not in your home yet. There are solutions to this situation that we can help you with.
And remember that all the coverages on your homeowners insurance policy apply only to your residence premises. Insurance for a commercial situation is treated much differently than for a personal residence.
As always, it is best to call us if you plan an extensive renovation, addition, or building to your home. We’ll go over the cost of the new construction so the coverage amount on your dwelling is adequate. You are very familiar with the cost of the addition as you build it, so we’ll be sure you figure that amount in to the total amount of insurance.
Also, there are credits available for newly constructed and substantially renovated homes. And you can save money if you’ve added a security system or raise your property deductible. Ask us about credits before you start, as you might be able to build them into your construction plans.
Then enjoy your new addition or renovated home!
Until next time,
Your SZW Team
Scalzo, Zogby & Wittig, Inc. is your New Hartford area independent insurance agent. Call us for a quote on insurance for your home, car, business, or life at 315.792.0000. Or request a quote here.