When you undertake home renovations, you may be putting your home at greater risk of damage or loss than ever before. What if something goes wrong? The costs would be immense, which is to say nothing of the considerable stress and disruption you and your family would face.
In this post we’ll discuss the insurance implications of home renovations, and explore why you may need to get dedicated renovations cover on top of your existing policy.
If you’re planning some home renovations, we can help you ensure you get the cover you need at the best possible price. For more information, call us on 0208 290 9093 or email shuaib.rahman@anthonyjones.com.
Does My Home Insurance Cover Renovations?
Usually not, no. Many homeowners assume that their home insurance will cover them for renovation work. Should anything go wrong, you can just claim on your policy, right?
Your home insurance covers your buildings. So when work is being carried out on those buildings, surely your home insurance will cover for you for any damages?
Sadly, this is a dangerous and false assumption. And in our experience, over 80% of people assume that their home insurance will cover them for renovations.
Your home insurance might allow you to carry out work, often up to a certain value. But even in this case, your home insurance may be invalidated if you don’t tell an insurer about your plans. Plus, the cover may be limited. It may not extend to your household possessions, for example.
And this isn’t the only misconception homeowners have when it comes to renovations and insurance:
Your Contractor’s Insurance May Not Cover You
Your property may get damaged as a result of builder’s negligence, in which case you could get a settlement. But your property may also get damaged by events that were not the builder’s fault.
For example, one of your walls may get cracked while an old extension is demolished. In this case, the builder’s insurance would not cover the damage.
Your Home Insurance May Not Cover You For Theft
If you move out of your house while renovations take place, then your insurer might consider your home to be unoccupied – even if there are contractors visiting the property every day.
House insurance policies do not typically cover unoccupied homes. So, your insurance may not cover you should any of your possessions get damaged or stolen during the renovation.
You need to tell your insurer about the project, and you need to specify that you will not be occupying the home throughout the renovations. Your insurer will then need to provide an explicit agreement that your contents cover will remain in place – and there’s no guarantee that they’d agree to this.
What If Your Home Insurance Cover Does Include Buildings and Contents Cover?
Yes, some home insurance policies do include buildings and contents cover up to a specified amount. However, some renovation projects include contractual requirements that a standard home insurer will not meet.
For example, JCT contracts are an essential component of renovation insurance, and they usually require the builder to be listed as a joint insured. This means that if damage is caused by the builder’s negligence, your insurers will not be able to recover their claim costs from the builder’s liability insurers. And because of this, your home insurers simply will not agree to this requirement.
How Likely Is It That Something Will Go Wrong with Renovations?
Renovations insurance premiums do not come cheap. This should give you a clue as to how common serious issues are in renovation projects. If serious problems during renovations were extraordinarily rare, then the insurance wouldn’t cost very much.
The relatively high cost of renovation insurance is proportionate to the risks you face when carrying out renovations. Insuring a renovation project is not the same as insuring a home. Effectively, the insurers are covering a building site, rather than a domestic property. This is a much riskier proposition.
What Happens If You Don’t Get Insurance Cover For Renovations?
Another reason why renovation insurance is relatively expensive because, if something does go wrong, it can cost a lot of money to put it right.
If you don’t get adequate cover for the renovation, then you may find yourself in a position where neither your own insurer nor the contractor’s liability insurer will deal with the claim.
A home insurer will not meet a claim which has been caused by the contractor’s negligence. Meanwhile, the contractor’s liability insurers will point to the contractual requirement for joint names insurance. If these have not been met, they will also refuse to deal with the claim.
Insurers May Not Fully Understand The Implications of a Renovation
Unfortunately, we’ve found that many insurers don’t seem to fully understand the implications of home renovations, either.
We’ve seen cases of homeowners who did tell their insurer about planned renovations. They specifically asked their insurer if they’d still be covered, and their insurer said yes.
But by “yes”, the insurer simply meant that the home would still be covered on a very basic level – such as for fires or floods. This does not necessarily mean that the home is covered for:
- Damages caused by contractors.
- Rebuilding costs should the renovation prove disastrous.
- Loss, damage, or theft of building materials.
- Non-negligent party wall liability – that is, damages to any third party properties over the course of the renovation.
- Employer’s liability – if you pay multiple contractors directly, then the law may consider you to be an employer. This means you’ll need employer’s liability to cover the contractors for any injuries they may sustain throughout the project. If you do not, you could end up paying a significant cost.
Do Not Rely On Your Home Insurance For Renovation
It should be clear by now that you cannot rely on your current home insurance policy to cover you for renovations.
You must tell your insurers about any planned renovations. But even when home insurers ‘note’ that work is taking place and agree to continue cover, they will have a specific exclusion that says, ‘any loss or damage relating to the works is excluded’. This means that your existing home could be damaged in various ways, but your home insurer would not cover it.
For total peace of mind, you’ll need to invest in dedicated home renovation insurance. We can help you ensure you get the cover you need at the best possible price. For more information, call us on 0208 290 9093 or email shuaib.rahman@anthonyjones.com.
