Unpermitted additions negate fire insurance?

Should you add square footage with your own hands, hire subcontractors to do it or pay a licensed contractor to oversee the project?

The upside to doing it yourself, as evidenced by this Westchester addition designed and built by an aerospace engineer and his brother, is that you get a bunch of new space for a lot less money.

The downsides come when you don't do it according to code and don't get permits. This engineer did all that correctly, as engineers are apt to do, but other types of homeowners may forgo those details.

If you do an addition without a permit or not to code, or both, here are some dangers, according to a story today at CNN.com:

- The structure could be unsafe for your family and future families.
- Unpermitted space could stop or delay a sale.
- You might have to tear down or expensively retrofit out-of-code upgrades later on.

But here's the most chilling danger I read, which is according Mark Brick, a past president of the National Assn. of the Remodeling Industry, as quoted in the article:

But if your new house burns down, and your insurer finds out it included unpermitted space, "they have a way to get out of any of their obligation as an insurance company," Brick said.

What do you think? Is unpermitted space a good idea? Would your insurance company use that as an excuse not to pay a fire claim?