It’s not unusual for an apartment renovation to inflict collateral damage on your own apartment, your neighbors’, and even your building. And while your contractor and their insurance are legally responsible, that only helps if--and that's a big IF--you can find them and prove they are negligent.
"We have found that some general contractors have shell corporations, and years or just months after an incident, they cannot be found or have no assets," says apartment insurance broker Jeff Schneider of Gotham Brokerage. "Moreover, proving their negligence can be difficult and involves hiring an attorney. Even dealing with their insurance company can be difficult if the contractor will not cooperate."
Bottom line: You’ll get paid a lot faster and suffer less stress if you file a claim with your own insurance company and let them take it up with your contractor’s insurance company.
Here’s a sampling of what can go wrong—and what your insurance will cover:
1. Construction debris gets flushed down the toilet, which then overflows into your neighbor’s apartment “We get claims for this several times a year,” says Schneider. “Damage can be in the tens of thousands of dollars—to your wood floors, to your neighbors’ and their belongings. If you can prove your contractor did it, great—but often you can’t.”
2. Uninsulated pipes that freeze and break during the winter “Sometimes contractors will run an uninsulated pipe in the exterior wall of an apartment to hook up a relocated air conditioning unit or to run a connection to a washing machine or dishwasher,” says Schneider. “It’s usually not an issue, but in really cold winter like the one we just had, pipes can break and damage your walls and floors and your neighbor's apartment below. This is a great example of something that might take years to surface, long after your contractor is out of the picture.”
3. The wrong hoses are used in the washing-machine—or improperly installed with the dishwasher—causing a flood “Sometimes contractors use plastic hoses instead of the rubber-and-metal ones. The plastic ones always break eventually,” says Schneider. “With dishwashers, we have seen loose connections come apart and water either leaking or gushing out."
4. Vibrations from hammering and other work creates a spider web of cracks on your neighbor’s custom-painted walls and ceiling—or actually breaks something "With a custom painting job or damage to high-end wallpaper, the losses can be substantial," says Schneider. "Photos are sometimes taken prior to work to establish a baseline."
5. Random acts of spectacular stupidity “We had a situation where the contractor attached a heavy mirror to a bathroom wall with epoxy glue,” recalls Schneider. “The epoxy held, but the paint broke. The mirror fell, knocked off the sink below, and resulted in a major, six-figure water damage claim. We also had a contractor install heavy marble slabs with weak glue on a kitchen island. A piece came loose and crushed a child's hand."
To protect yourself in situations like these, be sure to let your insurance company know ahead of time that you plan to renovate.
“They want to make sure the right precautions are being taken, such as having a fire extinguisher on the premises, and that your contractor has the proper insurance,” says Schneider.
If you don’t notify your insurance company, and you’re planning to move out for a long period of time during the renovation, your insurance could actually be voided. Other companies will raise your deductible significantly if a claim results from a substantial renovation project that equals or exceeds 10 percent of your apartment’s value.
Jeff Schneider is the president of Gotham Brokerage Co., Inc., an insurance brokerage that has been serving NYC renters, co-op and condo owners for over 45 years. For a free quote, click on over to Gotham Brokerage or give them a call at 212-406-7300.
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