1. When Structural Changes Are Involved – In general, a home remodel is considered new construction if it involves any structural changes to the home. This includes adding or removing walls, changing the home’s layout, or anything that would require a permit.
An alteration (remodel) is considered to be New Construction when: 1. Removal or replacement of 50 percent or greater of the linear length of the walls of the building (exterior plus interior) and 50 percent of the roof within a one-year period.
Is a remodel faster than new construction?
3. What is your timeframe? – Depending on the scope of the project, a remodel can be completed significantly quicker than a new construction, especially if key elements of the home (foundation, supporting walls, etc.) are reused. For individuals whose project involves the home that they currently live in, a remodel may make more sense than new construction.
Is a construction project considered new construction or remodeling?
At first glance, it may seem obvious whether to consider a construction project as new construction as opposed to remodeling for purposes of obtaining builders risk insurance to cover risk of loss during construction. In reality, the distinction isn’t quite so cut and dried.
For agents, it is important to understand the differences so you can explain it to your clients and quote the correct type of coverage for their projects. In builders risk insurance, new construction is defined as construction from the ground up. Generally, a builders risk policy should be purchased before construction even begins.
However, sometimes there is a need to get a policy when construction is already underway and has stopped. For example, let’s say your property owner client began construction with one contractor and took out a builders risk policy based on that contractor’s experience and qualifications.
Midway through construction, your client and his contractor parted ways. Your client still needs to finish his project with a new contractor, and will need a new builders risk policy. This is still considered new construction. When it comes to renovations, there are several different types of projects that can all be categorized as remodeling for builders risk insurance.
The common denominator for all of these projects is that there was already a completed structure in place before the new construction project started. Remodeling projects that can be covered under builders risk insurance include everything from installing or upgrading a kitchen or bathroom to major structural renovations.
If your client purchased an existing house and intends to hire a contractor to gut it and completely renovate the property, coverage will still be classified as remodeling since there is an existing structure. What’s more, home remodeling insurance can be written to include the existing structure, or to specifically cover only the renovation.
If your client’s project is a remodeling project, there are some specifics both you and your client should keep in mind:
If the home is registered as a historic property, it cannot be covered under the US Assure Builders Risk Plan insured by Zurich, though exceptions can be made for the improvements made to it. Likewise, coverage is not available for homes being lifted or moved from their existing foundations. Clients should be aware that losses will be limited to the policy’s named perils if there has not been construction activity in the 60 consecutive days leading up to a loss. Construction includes repair, replacement or installation of materials, including paint. So, this potential limitation on policy benefits can be avoided fairly easily with some planning on your client’s part. Clients considering purchasing coverage for remodeling projects should also know that many small projects will not qualify for coverage. To be insured under a builders risk policy, the renovations should be at least 20 percent of the existing structure’s value.
These are just some of the many nuances to builders risk insurance. As an agent, you will be in the best position to help your clients select coverage to meet their needs when you have a solid understanding of how builders risk insurance works. To learn more about eligibility, underwriting, coverage and how to get a remodeling insurance quote, read our free guide, From Groundbreaking to Remodeling: Builders Risk 101,
Then, contact us to get started writing builders risk insurance for your clients. This is intended as a general description of certain types of insurance and services available to qualified customers. Your policy is the contract that specifically and fully describes your coverage. The description of the policy provisions gives a broad overview of coverages and does not revise or amend the policy.
Builders risk can be confusing, but we’ve got you covered™. From Groundbreaking to Remodeling: Builders Risk 101 Guide will help you master the basics. Download now to learn more about the risks involved and how to choose the best coverage for your client.
What is considered remodeling a house?
What are the differences between Remodeling, Renovating, New Construction and Retrofitting? – A renovation project is the process of restoring or repairing a structure back to a good or “like new” condition. In the construction business, renovation can include, but are not limited to, re-facing cabinets, installing new light fixtures, replacing outdated and possibly dangerous electrical systems, and generally replacing or repairing any part or all of a home or building that is outdated, worn by time, or damaged and not in working condition.
This includes elements of a structure that may not meet present day building codes and pose a safety hazard to the owner and/or the general public if the structure or dwelling is to be used by people. But renovations also hold another purpose: Adding value to a home or other structure. Let’s say you want to sell your home, which was built sometime in the 1980’s, and as a responsible home owner, you kept most, if not everything, in good shape over the years.
Nonetheless, if you decided you wanted to sell your home, the realtor may advise updating your kitchen to add value and appeal to buyers. Replacing the linoleum tiles with porcelain tiles; replacing the cabinets with modern ones; and changing the sink with a better, more modern looking one is also considered renovations.
Completely transforming the structure and/or style of any space, home, or building.Changing the layout, in part or in whole, of any space, room, or garage area from the original floor plan.Combining rooms or other spaces within a structure that were once separated by a wall or any other sort of permanent partition.Adding or taking away from the exterior and/or interior of any structure.
When one is planning a remodeling project, they should understand that it can involve complex design considerations, causing the need to hire or consult an experienced and licensed building contractor and architect prior to beginning any remodeling project.
Remodeling projects need to be done right the first time, because if you have to go back and fix any flaws in the design, it can become very costly. Note: Per California Department of Affairs, Contractors State License Board : “This section guides you to your local building department. There are numerous building departments in California.
“According to the California Building Standards Code, no building or structure may be erected, constructed, enlarged, altered, repaired, moved, improved, removed, converted or demolished unless a separate permit for each building or structure has first been obtained from the building official.
Code requirements vary in different cities and counties around the state. Check with your local building department to find out what’s needed in your area. You may want to check city, county and/or town if necessary. See the links below to those agencies.” A new construction project is pretty straightforward, but each process can be unique and come with its own set of challenges and hurdles depending on the size and complexity.
New construction is constructing an entirely new home or building from the ground up, and includes every type of material that goes into any such project.
What is the difference between retrofit construction and new construction?
Most basic of phases in a new construction project –
Hiring an architect Choosing a builder Tender documents and contracts
Construction supervision and certification Commission and handover
A retrofit project has some similarities to remodeling in the fact that you are adding something to the original construction. And at times the two can seem to overlap. For example, if you wanted to make your home more energy-efficient, you could do a green retrofit, which could be anything from retrofitting heating elements in an older house to coincide with modern green energy standards, to new triple pane windows that bring about better insulation.
We offer energy-efficient building retrofit services. For more, please refer here, Seismic retrofitting is the modification of existing structures to resist seismic activity in areas at risk of earthquakes, ground motion, or earth slides. Home owners can even retrofit homes with “stilts” to prevent flood damage.
You can also find electricians who offer electrical system retrofits. Basically, if there is a need to retrofit it, you can find it. And as you can see, even though remodeling and retrofitting have some similarities, retrofitting is more or less a means to improve the functionality of a home or building by adding new technology, where as remodeling centers around aesthetics (and some functionality as well).