In the current economy more and more people are tackling DIY remodeling projects. It's important to understand that some improvements that you make to your own house may not be covered by insurance in the event of a problem.

Example 1

You are painting this weekend! It’s a long-postponed project, but finally, you are tackling it.

Sunday night, you are exhausted. One coat of primer and two coats of paint, and you still see the old, darker color shimmer through. Push on, add one more coat. Might as well do it right. When you’re done, you hurry to pick everything up. Rollers, brushes, drop cloths? In the trash bag they go. Tie it up and plop it in the garage. Deal with it tomorrow. Or next weekend.

But you forget that crumpled up, paint-stained drop cloths are highly combustible…

If this caused a fire, are you covered by your homeowner’s insurance?

In this situation, yes, there would be coverage. A fire loss that happens suddenly and accidentally, even if caused (as in this example) by negligence, is covered by your homeowner’s policy.

It’s going down as the summer of the bathroom remodel. You and your spouse decided to do it yourselves… both of you like doing this kind of work. Tearing out the old. Putting in the new. Taking care of the house. So you tackled the new bathroom together, laid the river-rock mural in the new walk-in shower, installed radiant heat under the new slate floor tile, and switched the location of toilet and vanity. You put a lot of thought and effort into this, got all your permits, and cleanly re-routed, installed and sealed the new copper pipes. Up to code!

Now, 3 months after the finishing brush stroke, something’s leaking!

At least, that’s what you suspect. When you come home at night, a puddle has collected between the toilet and the vanity. You mop it up, only to find it there again the next night. And you hate to admit it, but the strip of wall right above has gotten darker. And if you look closely (which you opt not to do), you can see fine hairline cracks.

You think of your homeowner’s insurance. Would your D-I-Y project be covered at all?

Well. Generally, your finished D-I-Y home improvement project would be covered for all the common perils insured on a homeowner’s policy, whether you do the work or a contractor does the work. But the perils covered on a homeowner’s policy have to be sudden and accidental occurrences.

And that’s the problem in this example. The answer here is: There might not be coverage. What happened here is a mistake, a construction defect. There are workmanship exclusions on a homeowner’s policy that apply whether the work was done by a contractor or the property owner. If the damage in this example was caused by faulty workmanship, not by a sudden and accidental occurrence, the loss would not be covered by your homeowner’s policy.

However, had you hired a contractor, you could sue him for repairs and or hold him responsible to fix the damage.

A side note: Water damage that happens over time (like a slow leak that causes dry rot) is generally excluded from coverage on your homeowner’s policy. So, it is critical to address any suspicious leaks immediately. They don’t go away on their own. They only become bigger (and possibly excluded) losses.

For more information on home insurance and how it relates to remodeling projects visit...

http://www.autohomeboat.com/research-center/real-life-situations/remodeling-my-house