After Super Storm Sandy many homeowners were required to raise their houses to be in compliance with new regulations for flood insurance. Many of our customers were in a bind to find contractors who did home elevation work. Once an experienced contractor was found, the next hurdle was does the contractor meet the insurance requirements to perform this home elevation.
In August 2014 Governor Christie signed into law the requirement that contractors doing home elevation work have to carry a certain kind of insurance and have a certain level of experience.
Under the new law a contractor will have to carry a minimum of $1,000,000 of Commercial General Liability coverage. This provides coverage for bodily injury or property damage to others that occur during the raising of a house. An exclusion found in a general liability policy is there is no coverage for damage to the house that is being raised.
With that in mind the new law also requires that the contractor carry another insurance policy that covers the actual house being raised. The law refers to this policy as “Cargo or other insurance that specifically covers home elevation activities.” In the Insurance Industry we call it a Riggers Liability policy. The limit of this policy is $1,000,000.
There is mention, too, that the contractor shall also provide $500,000 of coverage for the contents of the residential premises that are damaged during the home raising but not covered by the homeowners own insurance policy. So if you have a house being raised and resulting damage comes from this work, your insurance carrier will have to be notified because they may pay for at least the personal contents in your home.
When it comes to experience the law now requires that the contractor has 5 years in performing this kind of work. If the contractor does not have the required experience then the employee of the contractor doing the work must have the required 5 years of experience.
The NJ Department of Community Affairs will be the government agency that is responsible to figure out the additional rules and regulations which have yet to be revealed as of the writing of this article.
If a contractor says to you that they carry insurance, ask them for a “Certificate of Insurance.” Their insurance company or insurance agent can provide them one.
The insurance certificate will have two different areas to show Commercial General Liability and the Riggers Liability coverage mentioned above.