If you’re renovating or extending your home, you can’t rely on your existing buildings insurance – specialist cover is essential while work is underway.
Whether you’re building an extension, converting a loft, or reconfiguring space, it’s easy to focus on design and costs and overlook the financial protection your project really needs.
Jake Fitness, operations manager at Self-Build Zone, says: "Renovation insurance is designed to cover the unique risks that arise during building works, risks that standard home insurance policies often exclude. ‘Renovation insurance provides protection for both the existing structure and the works being carried out. This includes cover for the building itself, any new works or extensions and materials on site, whether they are stored or already in use."
Do I need renovation insurance?
For insurance purposes, a renovation typically means any structural alteration, extension or major refurbishment that changes your home’s footprint, rebuild value or risk profile.
‘Renovation’ covers more than obvious projects like extensions or loft conversions. Insurers deem removing load-bearing walls, major internal reconfigurations, roof replacements, large glazing installations, full rewiring or replumbing, and even significant landscaping works, as types of renovation work.
Cosmetic changes – such as redecorating – don’t affect the structure of your property and won’t require renovation insurance. If you’re unsure whether your home renovation project counts as one, check with your current home insurer. It can confirm whether your existing policy provides cover or if you’ll need specialist renovation insurance.
Matthew Durrant, managing director of i4me, explains: "Insurers deem a property to be a higher risk if it is undergoing renovations. It increases the chance of accidental damage, structural instability and a higher fire risk due to electrical works and other tools being used.
"There are also various tradespeople in the property, which can result in damage or injury. Properties can also often be unoccupied when undergoing renovations."
If you’re using a loan to fund the project, your mortgage provider will usually require you to have specialist renovation insurance to protect its financial interest throughout the works.
Why isn't standard insurance enough?
Some novice renovators may assume their standard buildings and contents insurance still covers them during renovations – but this mistaken belief can end up being very costly.
"Standard home insurance policies are designed to protect your property as it is right now," says Alex Parker-Walklate, chief insurance officer at Intelligent Insurance. ‘If you start doing major work projects like removing walls or adding another storey to your property, that becomes a different level of risk and it’s not something standard policies are built around.
"Liability is another point, as standard home insurance usually has limited or no provision for third-party injuries on a working building site. This means you will be responsible for covering specific scenarios if a neighbour’s property gets damaged or a contractor gets injured during groundworks."
What will renovation insurance cover?
Renovation insurance is designed to cover the specific risks that come with building work. A key element is ‘contract works cover’ – this is a collective term for the structures, materials and fittings being added to a property.
Most policies protect the existing building structure against risks such as fire, flood and storm damage, as well as accidental damage caused by contractors. They also typically include public liability cover for third-party claims.
If you employ workers directly, employer’s liability insurance is a legal requirement and is often included as standard. Many policies extend to tools, materials and site theft, with some also offering alternative accommodation if your home becomes uninhabitable, plus legal expenses cover for disputes.
"Renovation insurance covers the kinds of things that can go wrong during a project and it usually includes a few different types of cover," says Alex Parker-Walklate. "Building cover protects the structure of your home during renovation, including the parts that are not being worked on, while contract works cover, also called ‘all risks’ cover, protects the new build itself.
"Say a storm damages a half-finished extension or materials on site get caught in a fire, this is the cover that pays to fix or replace it," he explains.
Real-life scenarios where renovation insurance will help
It’s easier to see the value of renovation insurance when you picture the kinds of mishaps it protects against. The following are examples of when it pays to have the right cover in place:
- A burst pipe during installation can flood a newly fitted kitchen, ruining cabinetry and flooring – contract works cover would pay to put everything right.
- If electrical work sparks a fire that spreads through the loft, buildings cover would step in to repair the structural damage.
- Theft on site is another common issue: expensive fixtures such as bifold doors can be stolen before they’re even installed, but tool and materials cover would reimburse the cost.
- Renovation insurance also protects you from the fallout of accidents that affect other properties. If excavation for an extension causes the ground to shift and cracks appear in a neighbour’s wall, public liability insurance would cover the repairs and any legal claims.
Do bear in mind that renovation insurance is unlikely to cover you if your builder goes bust during the project. Although it will protect the work completed so far, your policy won’t cover the cost of bringing in a new contractor to finish the job. That risk falls under a separate product called ‘contractor insolvency insurance’ or a structural warranty with insolvency cover built in.
How much does renovation insurance cost?
The cost of renovation insurance depends on several factors. These include the type of work, whether the structure is being altered, the overall project cost, if the property will be occupied during the work and whether the work will be done by a single contractor, multiple contractors or by the homeowner.
"For an extension, allow approximately £400 to £1,500 for a low risk and up to £2,000 if a high risk," says Matthew Durrant. "Loft conversions tend to be cheaper, but the risk is slightly higher due to roof removal and weather exposure, with insurance costing approximately £300 to £1,200. Basement conversions are a higher risk, due to the increased structural risk to the existing property and neighbouring properties. Insurance costs can range from £1,500 to over £5,000."
Another important factor is the duration of the project. Longer builds typically attract higher premiums due to prolonged exposure to risk and the level of risk on site, such as the likelihood of theft, weather damage or accidents.
When should I start my renovation insurance cover?
You should arrange renovation insurance before work begins – ideally once you have a confirmed start date – so you’re covered from early stages like scaffolding and site clearance. Any gap in cover could leave you exposed to damage, theft or liability risks.
The insurer will want to understand how the renovation affects your home – for example, changes to layout, rooms or overall value.
Other important details you’ll need to provide include the expected duration of the works, cost estimates, whether the property will be occupied during the renovation and whether there is a formal building contract in place. If the project overruns, make sure you extend the policy.
You should also disclose the extent of the renovations to your current insurer before you begin work. This is because, under the Insurance Act 2015, policyholders have a duty to make a fair presentation of risk, which includes notifying insurers of material changes to the property, whether structural, financial or functional. Failing to do so can invalidate your existing policy.
You should also contact your normal home insurer at the end of the work, to update your property’s value. "Homeowners who don’t update their home’s value with the insurer after major improvements could easily find themselves underinsured," says Amy Rootham, home insurance expert at Compare the Market. ‘
Additions like a high-end loft conversion or a 'smart outbuilding' can push up rebuild costs, which means your current policy may not cover the full amount.’
Common renovation insurance mistakes to avoid
Assuming your existing policy is enough – Many homeowners think their standard home insurance will cover renovation works, but this is rarely the case. Most policies exclude damage caused by building activity.
Relying on your contractor’s insurance – It’s a common misconception that your builder’s cover will fully protect you. In reality, it’s designed to protect them – not your property, materials or liability to neighbours.
Only insuring while work is underway – Some assume cover is only needed when contractors are on site. However, risks like theft, vandalism and storm damage still exist when the property is empty.
Thinking renovation insurance is too expensive – Specialist cover can seem like an extra cost, but compared to the value of your project – and the risk of uninsured damage – it’s a worthwhile investment.
Not updating your standard buildings insurance – You should make sure you speak to your buildings insurance provider when the renovation work is finished. Changes to your home can increase the rebuild cost and your insurance premium could go up as a result.
FAQs
Where can I get renovation insurance?
If you’re planning a renovation or extension project, always compare policies carefully, as cover levels and exclusions vary. These providers specialise in renovation and extension cover:
One thing you'll also need to think of when factoring renovation insurance into your renovation costs, is how long your renovation will take. While most projects will have a timeline, it's not uncommon for delays to occur. Therefore it's always wise to factor in a contingency budget that includes extra insurance costs.
