Are the "Professionals" You've hired Properly Insured?

Always make sure you're fully covered when having repairs or renovations done on your home. This may mean upgrading your insurance coverage. It's a MUST to know you're covered against injuries to people, materials, the entire home and improvements.

It may seems inconsequential, but most insurance agents have at least a few horror stories to tell. An actual case involved a minor roof repair that ultimately ended up costing $1 million. The roofer used a blowtorch, igniting the house and burning it to the ground.

"Thousand-dollar job, million-dollar claim." The insurance company paid the claim and in turn, sued the contractor, the roofer, and both their insurers.

What coverage is right for you? If you're hiring a general contractor for an addition, increase your homeowner's policy before work begins, so the addition is covered as it's completed. Carry at least $1 million in liability coverage on your homeowner's policy. Also, to cover injuries, damages, and uninstalled materials, request certified proof of the contractor's license, workers' compensation coverage, and their general liability policy.

For large jobs, you can ask your contractor for a performance bond( you might have to share costs). It protects you if your contractor fails to finish the job.

List any valuables you have with your agent and ask the contractor to carry fidelity insurance, which guards against theft. It's a good idea to require proof of workers' compensation coverage for subcontractors working on your project. If it turn out they don't have it and someone gets injured, you're the one liable.

When acting as your own contractor, verify that your subcontractors have a current license, general liability insurance, and workers' comp for their employees.

If you're doing the work yourself, your homeowner's policy should cover you, with one exception: uninstalled materials (for example, if you crash a hammer through a $500 french door).

Before beginning work of any kind on your home, check with your agent about whether or not you need to extend your coverage. For more information, visit the Insurance Information Institute's web site at www.iii.org.