Renovations are stressful at the best of times, so it’s a good idea to have your home appropriately covered in case of any unforeseen mishaps. Home renovations will not normally be included in a standard home and contents insurance policy, so if you plan to add on to your home or change its structure then you will need to extend your coverage.
Extending your insurance policy to cover home renovations
Home renovations will not be covered unless they are specifically included in the wording of your policy. If you are going to renovate, you will need to inform your insurer of the changes you plan to make before you begin. If you are borrowing money to renovate, most financial institutions will require proof that you have the appropriate insurance.
If you do not notify the insurer before commencing they may void your contract leaving the rest of your home unprotected. For example, if you have flood and water damage cover this generally only applies to water that enters the home through gaps that have opened up as a result of storms or flooding. Water that enters through a hole in the side of your kitchen will not be covered if you haven’t extended your policy to reflect the renovations. Pipe breakage will also pose a problem if you want to make a claim but have failed to extend. Most policies will not cover theft or water damage during renovations.
Completed renovations that are not included in your policy will not be covered and nor will the contents being housed in the new development. Once renovations are complete, reassess the value of your home and update your policy.
Insurance for workers: property insurance and public and products liability cover
General home and contents policies are void if the work is not performed by a certified, approved professional. This is because damage that occurs through poor workmanship is not insured under general policies. Insurers can help locate a suitably qualified person.
Licenced trades people will generally have their own property insurance and public and products liability cover, but it’s best to make sure as you could be held liable in some situations if a worker is injured on site. You should consider purchasing your own public and products liability to be certain that you will not suffer financial hardship if you are found liable. It is also a good idea to ask your insurer about third party property damage in case flying debris from your renovations damages nearby property.
You can get information about your rights with regard to insurance from the Insurance Ombudsman. They may also be able to help determine the level of additional cover that you require. This will help identify if your insurer is being unreasonable about your actual needs.