Renovation insurance: what is it and do you need it?

If you’re carrying out major renovations on your home, you might find you need specialist renovation insurance to protect your investment. Here’s what you need to know
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  • Whether you’re extending your kitchen, converting your loft or adding a conservatory to your home, carrying out major home renovations can be an exciting time. It can also be a stressful and risky business which is why it’s important to consider renovation insurance to protect you if something goes wrong.

    What is renovation insurance?

    Renovation insurance is a type of insurance policy that is specifically designed to cover all the additional risks associated with home renovations. It will provide protection against damage to structures being built, and provide cover against injury for those carrying out the renovations.

    Building-an-extension-on-a-house-full-length-glass

    image credit: Future PLC

    How does it differ from a standard insurance policy?

    A standard home insurance policy won’t usually cover you for these additional risks or it will have specified limits in place. S.o it won’t be appropriate if you’re planning extensive home renovations such as a loft conversion or any structural alterations.

    What should a renovation insurance policy cover?

    The cover provided will vary depending on the policy, but typically you should be covered for:

    • Damage to the new building and existing structure as a result of fire or flooding
    • Theft of building materials, tools and equipment kept at the property
    • Theft or damage of your personal possessions
    • Damage to neighbouring properties caused by your renovations
    • Protection for your property if it’s left unoccupied
    • Public liability cover in the event someone is injured at your property while renovations are completed
    • Employers’ liability cover to protect you against claims made by anyone working on the site in the event of injury or death
    • Damage caused by subsidence, heave or landslip during the works

    Do I have to take out renovation insurance?

    Before starting any type of home renovation work, it is important to make sure you have adequate insurance in place to protect you if someone gets injured or your home is damaged during the renovations.

    For fairly minor home improvements, such as the installation of a new kitchen, it’s worth contacting your current insurer to double check whether your standard home insurance policy already provides sufficient cover. It’s best practice to inform your insurer of any work being carried out on your home anyway.

    But for more substantial home renovations you will need to take out a separate renovation insurance policy;  an insurance for building works.

    ‘It is always in the best interest of a homeowner to purchase specialist insurance when carrying out renovation works to their home,’ says James Vaughan, development underwriter at specialist insurer Hiscox.

    ‘Building works can increase the risk of claims occurring to a property caused by perils such as an escape of water, fire, or even subsidence or collapse for significant structural projects.’

    How much does renovation insurance cost?

    side return extension with skylights and long dining table with benches

    Image credit: Future PLC/ Colin Poole

    The cost of renovation insurance will depend on a range of factors. Including the expected length of the project, the estimated costs, the scope of the work being carried out, as well as the rebuild cost of the current property.

    ‘When purchasing renovation insurance, it is important to engage with your insurer as early as possible. Providing them with as much detail as you can,’ says Vaughan.

    ‘Some insurers have a preference of 30 days’ advanced notice of the project starting. Due to the complexity of building works, insurance quotes can often take longer to produce compared to a standard home insurance policy.’

    Where can I buy renovation insurance?

    You can buy renovation insurance from a specialist insurer or broker online. As with any type of insurance, be sure to shop around and compare your options. This ensures you’re getting the best level of cover at the best price.

    Check the small print carefully for any exclusions so that you know exactly what is and isn’t covered.

    ‘It’s important to remember that with so many different types of renovations out there, you can face a range of problems during your project, setting you back to the start. So it’s very important to ensure you get the right type of cover,’ says Brooke Crisp from Renovation Plan.

    Do I need to change policies when the project is complete?

    Some renovation insurance policies will provide continuous cover once the work is complete. But if not, you will need to revert to a standard buildings and home contents insurance policy, checking that you have the correct level of cover.

    ‘Renovations could add value to a property as well as the value of household contents,’ says Vaughan. ‘It is important to update the policy to ensure that the right insurance cover is in place.’

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