Renovation insurance might seem like an extra you can do without if you have standard home insurance, but did you know that any works undertaken as part of a renovation project may not be covered by your existing policy?
Most homeowners carrying out work to their existing property incorrectly assume that any works will automatically be covered under their existing policies, risking being left in dire straights should the worst happen.
For peace of mind and to protect your investment, it's vital to have adequate renovation insurance in place before you begin.
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Won't My Existing Policy Cover a Renovation?
In simple terms, anyone carrying out an extension or major remodelling project without contacting their existing insurer is in breach of their policy and at huge risk.
In most cases it won’t, and to make things worse, any structural work that you undertake will often invalidate existing homes and contents policies.
Most policies allow you to carry out simple internal alterations and refurbishment, but any additional building work has to be notified. It is best to speak to your existing home insurer in the first instance and describe, in detail, the scope of the project.
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Most insurers feel better about you using builders under a JCT contract (Joint Contracts Tribunal) – although, given the large number of subtly different JCT contracts, you need to be clear about which one you’re using – but it is down to the individual underwriters to take a view on each case.
For example, a homeowner carrying out a large extension and renovation project who is using a builder/main contractor for some but not all of the project may be required by their home insurer to agree to certain clauses on their policy.
These are likely to be that you will not be covered in the event of a flood if the property is at any stage where it is not wind and watertight, and a clause not covering theft of contents in the same instance. The insurer we spoke to about this situation did not require additional policy premiums.
The key, therefore, is to speak openly and honestly to your existing insurer. They are likely to be more queasy about insuring you if you’re moving out while work continues, and if a lot of the existing house is being demolished in the process.
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What If My Existing Provider Won't Cover Me?
If your existing home insurer won’t cover you – particularly if you are planning to take on the builder’s role yourself – then some insurance providers can provide a home improvement policy which will provide cover for all normal builder’s risks, together with public and employers’ liability.
The existing building is covered up to 110% of its value and the proposed works, up to 125% of their value or contract price. It is quoted according to the job and the costs of the proposed works.
Don’t forget that your homes and contents policy will need updating once you have completed the work to reflect the additional space and, presumably, rebuild value of the home.
Editor's Note: Homebuilding & Renovating has partnered with leading self build and renovation insurance provider Self-Build Zone to create bespoke insurance products for those wanting to build, renovate or extend their own home.
What About Insurance for Conversions?
Essentially working on a conversion project (i.e. turning an existing building into a home) is not that different to working on a new build, and the same problems can occur.
Conversion insurance policies are available from the dedicated providers and they follow similar lines to the home improvement policy, covering up to 110% of the value of the existing structure and 125% of the proposed works or contract value, together with employers’ and public liability insurance.
Once again, as you’d expect, each policy is priced according to the nature and scope of the works and their value.
For both renovations and conversions the premium may have to be assessed by reference to a survey.
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David is one of the UK's leading self build and plotfinding experts, and a serial self builder who has been building homes for 50 years. The author of Building Your Own Home, David spent decades as a speaker and expert at self build exhibitions such as the Homebuilding & Renovating Show. He has recently finished his fourteenth self build project.