You’ve got your design drawings; the contractors are lined up and you are all set to go for your dream house extension or renovation. Before you give the green light to go ahead, wait…
Are you adequately insured should something go wrong during your building work?
We don’t want to cast water on the fire of your enthusiasm but many homeowners have found themselves in the terrible situation of assuming their renovation was covered either by their existing buildings insurance or the public liability insurance of their contractors – only to be left stranded when something went wrong.
This is the last thing we want to happen to anybody, so we recommend every homeowner asks the following questions before they commence building work. You may find you already have sufficient cover but it’s always best to check to be on the safe side.
1) Has Your Contractor Got The Necessary Insurances?
Your building contractor should have a range of insurances in place to protect all the refurbishment work and their employees and to insure against damage to third parties. Talk to your contractor about their policies. Their cover should be adequate to address all the risks involved. If the building work is damaged during the project, the contractor will be liable for all the costs involved, subject to their negligence but do check that there aren’t any limited liability clauses or significant exclusions.
Your contractor should already have Employers Liability Insurance, Public Liability Insurance, Work In Progress insurance and insurance to cover damage or theft to building materials. Ask to see their policy documentation.
2) Are You Aware Of Your Liabilities?
Your existing structure and its contents are your responsibility. You will struggle to make a claim against your contractor should your home be damaged during the renovation, so get in touch with your home buildings and contents insurance provider to check if they will continue cover and the level of cover they will offer. Some providers are reluctant to cover during house renovations, in which case you will have to look for a specialist provider such as Magnet Insurance.
3) Will Your Existing Insurance Broker Be Able To Arrange Cover For Your Home During The Renovation?
It’s important to inform your current insurance broker about the renovation before the date it starts, as failure to do so could invalidate your existing policy. Your insurance broker will need to evaluate a series of risks associated with the renovation before they decide whether or not your existing policy is still suitable. These include the projected redevelopment costs, the extent and nature of the structural changes to the existing building, occupancy during the build, who will be conducting the work and what sort of contract you have with your building contractor.
4) Do You Need Specialist Insurance To Cover Your Renovation?
All too often, homeowners find that the proposed renovations invalidate the terms of their current home buildings insurance policy. The insurer will then present them with a number of choices:
- They may reduce cover on the existing structure of your home and increase your premium
- They may maintain your existing home cover as long as the building works costs does not exceed their acceptable limit.
- They may cancel your insurance policy – making you entirely dependent on yours or your contractor’s public and employer’s liability insurance.
We do not recommend you countenance any reduced level of cover during a home renovation, as there are too many risks involved.
The majority of house renovations proceed without incident but there is always a risk of fire, accident, injury, vandalism or theft which should be guarded against. With your home at stake, even a slight risk is too much to take. The alternative to higher premiums and reduced cover is taking out a specialist home renovation insurance policy. These policies, provided by specialists such as Magnet Insurance, are specifically tailored to the nature of your project and cover you against the risks inherent to the work.
The Renovation Insurance Guide
Home renovations are exciting and life affirming projects but must be entered into with care. At Magnet we specialise in tailored insurance policies to give you complete peace of mind, whatever the nature of your build. For more information about choosing the right policy, please download our free guide: Protecting Your Home During Building Work: The Renovation Insurance Guide. Covering topics such as risk management, Joint Contracts Tribunal (JCT) contracts and negotiating with contractors, the free e-book can be accessed by clicking here.
