(Insurance) lessons we can all learn from the Scituate, MA fire.

If you zoom out and take a moment to think about it, insurance is the cheapest thing you can purchase when considering all the risks it covers. Often, it is only after a dramatic event like this that we take the opportunity to ask important questions. Would your homeowner’s policy provide enough coverage in this situation? Would your insurance carrier’s claims process be smooth and straight forward?

7 p.m., Friday March 24th, Minot Beach.  

Seven beachfront homes were affected with five homes declared a total loss. Thankfully, there were no injuries or fatalities. While this is catastrophic, it offers some important lessons regarding homeowner’s insurance. The home under the arrow was under construction. While the source of this specific fire has not yet been determined, it is a well-known fact that homes undergoing construction or renovations significantly increase the chances of an accidental fire affecting adjacent properties.  

This loss hits close to home for me. I grew up in Scituate right up the street from where this fire occurred. After seeing the aftermath and devastation, I decided to dedicate this blog post to review the additional insurance you may need if you and your family are planning to renovate or remodel your home. Even if you are not undertaking a renovation project, but your neighbor is, this blog post is also for you. Your neighbor’s renovation puts you at higher risk and your insurance policy is your first layer of protection if you are affected by an event like the Minot fire.  

Home insurance for construction projects. 

Did you know that many homeowner insurance policies do not provide coverage if your home is undergoing any type of construction or renovation? If you are planning a home improvement project, you may need to purchase a separate policy to protect you in the event of a fire or other similar event. If your planned project meets any of the following criteria, it is more likely that you will need this special type of coverage:

• The cost of the project is greater than 10% of the value of the property. 

• The project will take more than four weeks to complete. 

• You and your family plan to live away from your home during construction.  

If any of these are present it may cause your insurance carrier to deny a claim in the event of a loss if you don’t have the right coverage in place. To avoid this, working with your trusted insurance agent to secure a Course of Renovation or Construction Policy, also called a Builders Risk Policy, will help protect you during the renovation process. Unfortunately, this can significantly add to the cost of a construction project. Although this often varies based on the scope and scale of your plans, you can usually expect to pay roughly 1%-5% of the cost of the renovation.  

Buyer beware - not all policies are the same. 

I say this a lot because it’s true. Homeowner course of renovation policies and umbrella policies (I recommend EVERYONE have an umbrella policy) all vary in their coverage and the ease with which claims are processed. In addition to obtaining broad coverage, it is wise to purchase a policy from a carrier with high quality claims processing, and proactive risk management. As part of your process, you will also want to: 

• Understand what is excluded from your insurance policy – The devil is in the details and these types of policies can be customized and negotiated to meet your specific needs.  

• Read the fine print. Contractors often include a “waiver of  subrogation” clause in their contracts. Before signing a contract, be sure that the terms of the contract do not waive your right to recover payment for a loss caused by a negligent third party. If a contractor is negligent or careless when working on your home, you will want to be able to recover what you lost. You don’t want your future insurance premiums to be increased because of your contractor’s negligence. 

• Confirm your contractor is adequately insured – Ask for a “certificate of insurance or liability” to confirm adequate limits. If you are undergoing a $2M renovation project and your contractor has only $1M in coverage, you should ask them to increase their coverage.  

• Make sure you have adequate loss prevention measures in place during the project. Examples include: fire and burglar alarms, no smoking signs and on-site U/L approved containers to store flammable materials during construction.

The importance of working with an insurance agent you trust.  

Back to the devastating Scituate fire - my heart goes out to the families affected. Regardless of the cause of the fire, I hope that all the families affected had adequate insurance coverage in place so they can focus on rebuilding. Furthermore, I also hope that if the fire originated in any of these houses that specific owner had an umbrella policy with enough coverage to help with the repair and reconstruction of their neighbors’ homes. Finally, I hope this blog post reminds anyone reading it to take some time to review their insurance policies. This is where working with an insurance agent you know and trust can be extremely helpful. These policies are often complex and someone with detailed knowledge of the industry can make sure you are adequately protected in case something like the Minot fire affects you. Losing your home is extremely difficult. If it happens to you, worrying about whether you had enough insurance coverage to let you rebuild should be the last thing on your mind.

Work with us. How NaVella is different:  

NaVella was created out of equal parts love and frustration with the insurance industry, its complexities, and the ever-evolving market space. We are on a mission to over deliver and work with the most exclusive high-value insurance carriers in the world.  

With more than 16 years of experience in multiple facets of this industry, 1000+ insurance  policies analyzed and reviewed, and hundreds of customized insurance portfolios crafted, we  are dedicated to giving you control over what and how you protect what you care about most.  

We are a woman-owned, progressive, independent insurance agency and consulting firm. We  offer personal lines insurance solutions. Our product solutions include insurance for your:  Home(s), auto(s), collection(s), Excess + Umbrella, boat, and term life. Our consulting and  coaching services serve both personal and corporate clients. Headquartered in Massachusetts,  and primarily focused on the Massachusetts and greater New England markets, we can write  nationally. 

If you’re ready to protect yourself now and in the years to come, please visit us at  www.navellains.com, email us at hello@navellains.com, or call us at 617.399.3124. 

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