Renovating Your Home? Don’t Overlook These Critical Insurance Risks

If something goes wrong during construction, the cost may be far more than you planned for. 

Your Policy Might Not Cover New Construction or Upgrades  

Most homeowners assume their current insurance will automatically cover renovations, but that’s not always the case. If your project significantly increases the value of your home or adds square footage, you may be underinsured once it’s done. 

What to do:

• Contact your insurance advisor before the project begins.
• Update your policy to reflect any additions or upgrades.
• Ask about a builder’s risk policy if the renovation is major or involves structural changes.  
  

Uninsured Contractors = Massive Liability for You  

If a contractor or subcontractor gets injured on your property and doesn’t have proper insurance, you could be held financially responsible. This includes injuries from falls, equipment accidents, or even long-term illnesses caused by materials used.

  
What to do:

• Always verify your contractor carries general liability insurance and workers’ compensation.
• Ask for certificates of insurance and check expiration dates.
• Avoid paying in cash or hiring “under-the-table” labor—this can void protections. 
  
  

Subcontractors and Workers in Your Home = Liability You May Not Expect 

If your contractor brings in subcontractors (electricians, drywall installers, etc.), make sure they’re covered, too. Your homeowners insurance likely does not cover injuries to workers unless it’s explicitly included—and even then, coverage is often limited. 

What to do:

• Request a list of all subcontractors from your primary contractor. 
  
• Ensure each is insured—or confirm your general contractor is liable for them.
• Consider increasing your liability limits or adding umbrella coverage.  
  
  

Damage During Construction Isn’t Always Covered  

Let’s say your contractor accidentally breaks a pipe and floods your basement—or a power tool sparks a fire. Depending on the cause and your policy, you might not be covered for the resulting damage.

What to do:

• Ask your insurance agent about “open peril” coverage or endorsements for construction.
• Document your home’s condition with photos before work begins.
• Store valuables and irreplaceable items safely away from the work area. 

Permit Issues and Unlicensed Work Can Void Coverage 

If your contractor skips required permits or isn’t licensed, it can come back to bite you—especially if the work causes damage or leads to a claim. Some policies may not pay out if illegal or unpermitted work was involved. 

What to do:

• Ensure all necessary permits are pulled.
• Verify contractor licenses with your city or state.
• Don’t sign off on final work until inspections are complete and passed. 
  
  

Building the Dream? Don’t Risk a Nightmare  

Before you start swinging hammers or pouring concrete, let the Ansay team review your homeowners insurance to help make sure you’re fully protected. Renovations should build value—not expose you to avoidable loss. 
 
Visit Ansay.com to request your Construction Coverage Review today.  

About Ansay & Associates 

At Ansay, we help you protect what you’re building—literally. Our team understands the unique risks that come with home renovations and construction, and we’ll help you safeguard your property and finances every step of the way. 

While these safety tips can help minimize risk, no precaution is foolproof. Ansay & Associates provides this blog for informational and educational purposes only. All content on the site is provided in good faith; however, Ansay & Associates makes no representation of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability, or completeness of any content on the site. 

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