Yes, homeowners insurance may cover damage caused by a contractor, but only in certain situations and under certain conditions.
It depends on the type and extent of the damage, the terms of your homeowner’s insurance policy, and the contractor’s insurance and liability.
Carefully review your policy and communicate with both your insurance company and contractor to address the situation and potentially submit a claim.
What Are the Exceptions to Homeowners Insurance Covering Damage Caused by a Contractor?
Homeowners insurance usually covers destruction done by a contractor. But, there are some exceptions. Your insurance may not pay for the damage if it falls into one of these categories:
- Intentional destruction, like malicious or criminal behaviour.
- The contractor is not licensed or insured.
- Your contract with the contractor says that certain destruction is their responsibility.
- The destruction is caused by faulty workmanship and not an accident.
How Can Homeowners Protect Themselves from Damage Caused by a Contractor?
Homeowners can protect themselves from damage caused by a contractor by following some of these tips:
- Do diligent research to find a trustworthy and reputable contractor. Read reviews, ask for recommendations, get at least three quotes, interview them, verify their license and insurance, and check their status with the Better Business Bureau.
- Review and understand the contract before signing it. Make sure it includes clear and detailed information about the scope of work, the materials and equipment to be used, the timeline and milestones, the payment schedule and terms, the warranty and guarantee, and the dispute resolution process.
- Communicate with the contractor throughout the project and document any issues or changes that arise. Keep a record of all correspondence, invoices, receipts, contracts, permits, and inspections.
- Monitor the progress and quality of the work and inspect it regularly. If you notice any problems or defects, notify the contractor immediately and ask for a correction or explanation.
- Avoid paying in full or in cash upfront. Pay only according to the agreed payment schedule and terms, and withhold the final payment until you are satisfied with the work and have received all the necessary documents.
- If a contractor causes damage to your home, report it to your insurance company and your contractor’s insurance company as soon as possible. Take photos and videos of the damage and keep all receipts and estimates for repairs.
What types of damages caused by a contractor are typically covered by homeowners insurance?
Although substandard craftsmanship is not typically included, damages arising from the work can be covered.
For instance, if a contractor inadvertently damages something during work on your house, your insurance might cover repair expenses.
Moreover, homeowner insurance usually covers damage associated with remodelings, like unintentional harm from changes or fixes.
Does homeowners insurance cover damage caused by a contractor who was hired by a previous homeowner?
Homeowners’ insurance covers damage from accidents or unforeseen events, like fire, water damage, or structural damage, but not from poor workmanship, negligence, or breach of contract by the contractor. If the prior homeowner hired a contractor who did a poor job or installed something incorrectly, resulting in damage to your home, your insurance may not cover it. You might need to seek recourse from the prior homeowner or the contractor, but it could be tough if you don’t have evidence of the work or the contract. It’s important to thoroughly inspect your home before buying it and search for any defects or issues caused by previous contractors.
Can a homeowner be held liable for damages caused by a contractor if they didn’t hire the contractor themselves?
Yes, a homeowner can be held liable for damages caused by a contractor if they didn’t hire the contractor themselves, but only in certain situations and under certain conditions.
It depends on the nature and extent of the damage, the terms of the contract between the previous homeowner and the contractor, and the degree of fault or negligence of the parties involved.
Some possible scenarios where a homeowner can be held liable are:
- The homeowner knew or should have known about the damage caused by the contractor and failed to disclose it to the buyer or fix it before selling the property. This may amount to fraud or negligent misrepresentation, and the buyer may sue the seller for damages.
- The homeowner was aware of or contributed to the unsafe conditions that caused the damage by the contractor. For example, if the homeowner did not provide adequate lighting, ventilation, or access for the contractor to work safely, and this resulted in damage to the property or injury to someone. This may amount to negligence, and the injured party may sue the homeowner for damages.
- The homeowner interfered with or modified the work done by the contractor without their consent or knowledge. For example, if the homeowner changed the wiring or plumbing installed by the contractor and this caused a fire or a leak. This may amount to a breach of contract or negligence, and the contractor or the affected party may sue the homeowner for damages.
However, a homeowner may not be held liable for damages caused by a contractor if they didn’t hire the contractor themselves in some situations, such as:
- The damage was due to poor workmanship, negligence, or breach of contract by the contractor. For example, if the contractor installed faulty materials or equipment that caused damage later on. In this case, the contractor should be responsible for their own actions and liable for damages.
- The damage was accidental and unforeseen, and not caused by any fault or negligence of the homeowner. For example, if a contractor dropped a tool and broke a window while working on another part of the house. In this case, the contractor’s insurance should cover the damage.
- The damage was excluded by the contract between the previous homeowner and the contractor. For example, if the contract specified that certain types of damage were not covered by warranty or guarantee. In this case, neither party may be liable for damages.
Are there any exclusions in homeowners insurance policies that specifically exclude coverage for damage caused by contractors?
Yes, there are some exclusions in homeowners insurance policies that specifically exclude coverage for damage caused by contractors. Some common exclusions are:
- Poor workmanship: Homeowners insurance does not cover damage caused by poor workmanship, negligence, or breach of contract by the contractor. For example, if the contractor installs something incorrectly or does sloppy work, and this causes damage later on, the homeowners insurance will not cover it.
- Faulty materials or equipment: Homeowners insurance does not cover damage caused by faulty materials or equipment used by the contractor. For example, if the contractor uses defective wiring or plumbing that causes a fire or a leak, the homeowners insurance will not cover it.
Professional liability: Homeowners insurance does not cover damage caused by professional services rendered or failed to be rendered by the contractor. For example, if the contractor gives bad advice or design that causes damage or injury, the homeowners insurance will not cover it.