Renovating a High-Value Home in Fairfield County, CT: Builders Risk, Dwelling Limits and Vacancy

Connecticut Valuables Series · Part 5 of 6
By Jon Merwin, Founder and CEO, Licensed Insurance Advisor

Fairfield County homeowners renovate on a serious scale: a new kitchen and primary suite in Darien, a full gut of a waterfront house in Greenwich, an addition and pool house in Fairfield. Projects like these are exciting, but they also create a window when the home is more exposed than usual to fire, theft, water damage and liability claims.

Here’s what to sort out with your agent before, during and after a renovation on a high-value home.

Before work starts: tell your carrier

A homeowners policy is priced and written for a finished, occupied home. A major renovation changes that: walls are open, crews come and go, tools and materials sit on site, and the home may be empty for months. Many policies require you to notify the carrier of changes that increase the risk, and some carriers want to review large projects in advance. Calling early lets your agent confirm whether your current policy will respond during construction or whether you need builders risk or a renovation endorsement.

Builders risk insurance

Builders risk insurance covers a structure while it’s being built or renovated. Depending on the form, it can cover:

• The new work itself, such as framing, systems and finishes.
• Materials and fixtures stored on site, and sometimes in transit or at another location.
• Certain additional costs if a covered loss delays the project.

Who buys it?

On renovation projects, either the owner or the general contractor may buy builders risk. Your construction contract should say who is responsible. If the contractor buys it, ask for a copy of the policy or a certificate showing you as an insured or loss payee.

Fitting it with your homeowners policy

The goal is no gaps and no confusion. Ask your agent which policy covers the existing structure, which covers the new work, and which covers your contents. On a full gut renovation, some carriers move the home to a builders risk or dwelling policy for the duration; on a smaller project, the homeowners policy may continue with an endorsement.

Your contractor’s insurance and registration

Under the Connecticut Home Improvement Act, an individual or business contracting with a consumer to perform home improvement work on residential property is generally required to register with the Department of Consumer Protection. Trades such as electrical and plumbing work fall under separate trade licenses. Verify registration and licenses before you sign.

Then ask for proof of insurance:

• A certificate of general liability insurance from the general contractor, with limits that fit the size of your project.
• A request that you be named as an additional insured on the contractor’s liability policy.
• Confirmation that subcontractors carry their own liability insurance.
• Auto liability for vehicles used on the job.

Ask your attorney to review the insurance and indemnity provisions in the contract.

Moving out: vacancy and unoccupancy

Many families move out during a large renovation. That can trigger vacancy or unoccupancy provisions in a homeowners policy, which may restrict coverage for certain losses, such as vandalism, glass breakage or water damage, once the home has been empty for the period stated in the policy. Before you move out:

• Tell your agent the expected dates and whether any furniture or contents will remain.
• Ask whether you need a vacancy permit, an endorsement or a different policy.
• Keep heat on in cold months and arrange regular inspections.
• Shut off water to areas not in use, and consider leak detection with remote alerts.
• Keep the alarm system active and give contractors their own codes.

Your valuables during the project

Move jewelry, art and wine out of the work zone. If they go to storage or another home, confirm that your scheduled coverage applies at the new location and in transit.

Fire, theft and water on the job site

Renovations bring heat sources, temporary wiring, open walls and unlocked doors. Ask your contractor about rules for hot work such as soldering and roofing torches, daily cleanup of debris, and securing tools and appliances overnight. Theft of materials and fixtures from job sites is a real risk, so schedule deliveries close to installation dates.

After the project: update your dwelling limit

A renovation usually increases what it would cost to rebuild your home. If your dwelling limit isn’t updated, you could be underinsured after a major loss. Ask your agent for a new replacement cost estimate once the work is complete, and share final plans, finishes and costs.

Inflation protection and building code coverage

The Connecticut Insurance Department describes inflation protection as a feature that automatically adjusts policy limits for increases in the cost to repair or rebuild. It helps, but it isn’t a substitute for updating the limit after a major project. Also ask about ordinance or law coverage, which can help pay for upgrades required by current building codes when you rebuild after a covered loss.

Where the carrier fits

Cincinnati and Chubb are similar high-value carriers that compete with each other and write homes at any dwelling limit, so we quote both. We coordinate homeowners, builders risk and umbrella coverage and compare options from 40+ carriers. Read more about high-value home insurance in Connecticut, our Fairfield insurance agency page, or our Darien high-value home guide.

We serve homeowners in Greenwich, Darien, New Canaan, Westport and Fairfield from our Fairfield office at 1885 Post Road and by phone, email and online.

Frequently asked questions

Do I need builders risk insurance for a home renovation?

For a major project, often yes. Your carrier may not cover the work in progress under your homeowners policy. Ask your agent before work starts, and check your contract to see whether you or the contractor buys it.

Does my homeowners policy cover my house during a renovation?

It may, but large projects can change the risk, and some policies require notice. Your carrier may add an endorsement or move the home to a different policy during construction.

What happens to my coverage if I move out during construction?

Vacancy or unoccupancy provisions can limit coverage for some losses after the period stated in your policy. Tell your agent your dates before you move out.

Do Connecticut contractors have to be registered?

Under the Connecticut Home Improvement Act, contractors doing home improvement work for consumers generally must register with the Department of Consumer Protection. Trade work falls under separate licenses.

Should I raise my dwelling limit after a renovation?

Usually. Improvements typically increase the cost to rebuild. Ask for a new replacement cost estimate when the work is complete.

Sources

• Connecticut Department of Consumer Protection, Home Improvement Contractor
• Connecticut Insurance Department, “Homeowners Insurance – Common Terms”
• Connecticut Insurance Department, Water Damage Prevention Tips (pamphlet)

Coverage depends on your policy, the carrier and its underwriting. Read your policy wording for the terms that apply to you. This article is general information, not legal or tax advice.

Related reading: our guides on household staff and liability insurance in Fairfield County.