Add insurance to your project budget

Chances are you created a project budget for your remodeling or construction project.

But chances are just as good that you neglected to tack on an extra line item for added insurance.

Your standard homeowner’s policy probably won’t cover every aspect of the project. Most home insurance is intended to protect what’s already there, not what you plan to add, improve or renovate.

Lost, damaged or stolen materials will need to be replaced. If you don’t take adequate security precautions, portions of a standard policy may be void.

If a worker, neighbor or passerby is injured because of some lapse in the process that could be linked to you, you could be on the wrong end of a legal skirmish.

It will be worth your time to invite your insurance agent for an informal discussion or walk-through of your project intentions. The agent will be able to suggest riders to existing policies that won’t cost an arm and a leg. The riders will be for the term of the project itself.

Eric Goldberg, associate general counsel of the American Insurance Association, says not enough homeowners bother to read existing policies to find what it does cover nor do they talk their plans over with their agent who can recommend how to fill any gaps in coverage.

On top of liability and theft coverage is a bump in total coverage for your home. Goldberg says that “with the way real estate prices are going, if the improvement increases the overall value of your home, you’ll need to be covered.”

It can be particularly unfortunate if the house is damaged by fire or storms and you won’t receive enough insurance proceeds to rebuild.