Does homeowners insurance cover contractor damage?

What damage is typically covered?

Accidental damage to your home's structure

Dwelling coverage may cover repairs if a contractor accidentally damages the structure of your home.

Damage to your belongings

If a contractor accidentally damages your personal property or belongings while working on your home, personal property coverage may cover the repairs.

Additional living expenses

If damage from a contractor's error leaves your home unlivable, your policy may help with the cost of staying elsewhere.

What damage isn't covered?

While you may be covered if a contractor breaks something, homeowners insurance won't pay for damages involving poor workmanship. When a contractor installs something incorrectly, does sloppy work, or you aren't happy with their design, you need to come to an agreement with them on how to correct the poor quality of work. If no agreement can be reached, you may file a complaint with the governmental agency that licensed them or even file a civil lawsuit.

Damage vs. poor workmanship: what's covered

The following examples illustrate how your homeowners policy may cover damages but not poor-quality work:

• A plumber does a poor job installing pipes, resulting in a leak. Your homeowners insurance may cover water damage to your walls, floors, and furniture up to your policy’s limits. However, the cost of reinstalling the pipes likely won’t be covered.
• An electrician wires a room incorrectly, and a fire breaks out. Your insurance may cover damage to your home and belongings caused by the fire, up to the limits of your policy, but not the cost to rewire the system.
• A contractor hastily installs a built-in entertainment unit, and a shelf collapses. Insurance probably won't cover the cost to rebuild the unit, but it may pay to repair or replace any belongings that are damaged, such as your TV or gaming console.
• The contractor knocks over a ladder, and it smashes through your sliding glass doors. Your homeowners insurance may cover the cost to replace the damaged doors.

Note that your policy may include a deductible and/or a sublimit on certain items. Your insurance company may seek reimbursement for the party responsible for the damages.

What to do if a contractor damages your property

Follow these steps if a contractor causes damage to your home or belongings:

1. Document the damage: Take photos and videos of the damage.
2. Contact the contractor: They may have insurance to cover the damage.
3. Document payments: Keep physical or digital receipts of out-of-pocket expenses for temporary fixes or accommodations.

What to do if your contractor damages your neighbor's property

If a contractor damages your neighbor's property, your contractor is liable for the cost of repairs. Likewise, if your neighbor's contractor damages your property, your neighbor's contractor is usually responsible for covering the damage.

Tips for hiring a contractor

One way to avoid poor or inadequate work is to check the qualifications and work history of your contractor before signing a work contract:

• Make sure they have insurance: This can make reimbursement easier if the contractor damages your property and may cover the damages they cause while working on your house.
• Look at their past work: Read up on reviews, check out photos of previous work they've done or check with reliable family and friends for recommendations.
• Verify their license: Contractors need to have a valid business license. If you use an unlicensed contractor and the work they do is unsafe or not to code, you may be responsible for correcting the issue. You can verify the contractor's license with the Better Business Bureau or ask the contractor for their license number and verify it with your state's licensing board.

Are you covered if a contractor is injured on your property?

If a contractor is injured on your property, you could be held responsible. For example, if your roof was rotting and you didn't repair it or notify the contractor, and they are injured in a fall due to the faulty roof, you may be considered negligent. In this case, you may be covered by your personal liability coverage under your homeowners policy.

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