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Renovation insurance or unoccupied insurance?

If you’re researching insurance options online, you may get confused between unoccupied property insurance or renovations insurance, especially if both apply to your home.

Renovation insurance or unoccupied insurance?

Renovation insurance or unoccupied insurance?

If you read about both options, they’ll probably start to look like different products entirely, and it may be tough to decide which one is best for you.

If you find yourself in this situation, the best thing to do is to speak to a specialist insurer who is experienced in dealing with properties undergoing renovation, and unoccupied properties as well, such as us at GSI Insurance Services (Southern) Ltd. who have both options available, and can make the best selection between the two.

Most property insurance policies ask that you let them know before you start any renovations projects, and consider a property unoccupied if it hasn’t been stayed in overnight for 30 days. This therefore means that even if your builders are there during the day, that wouldn’t count as being occupied. This also applies if the home isn’t furnished to a liveable standard, so moving contents out to storage so that it isn’t damaged would also make it qualify as unoccupied.

Therefore, if the level of work is large enough that you have to move out, you will definitely need something more specific than a typical home insurance policy. Whether that would be unoccupied property insurance or renovation insurance comes down to how big of a project it is, in terms of time, budget, and scope.

For example, you might have purchased a property that will be let to tenants in the future. The decor may be tired and run-down, and in need of modernisation before it goes on the rental market. While it may involve work in virtually every room, new carpet, painting and decorating throughout could be accomplished for less than £25,000. In this instance, because the budget is relatively low, and no structural work is taking place, you probably don’t need the additional cover afforded to you on a renovations insurance policy.

Renovations insurance can be used to protect the physical works in progress against loss or damage as well as the existing structure and fabric of the building during property renovation.  For example if you are halfway through a £100,000 budget extension that becomes damaged due to a claim, it would cover for the materials and labour that was put into it. It may also extend to building materials you own, such as roof slates or a bathroom suite. Renovations policies can usually accommodate unoccupied homes, or properties that will continue to be lived in throughout.

It can also cover for any liability you are faced with as a property owner, in case a member of the public is injured as a result of the project, such as a tool or building material falling off scaffolding to the pavement below.

Generally with insurance, the level of risk determines the premiums companies charge and the terms they apply. As we can see from the above example, a renovations insurance policy can provide additional cover that is specific to a building project, but with that comes an additional cost. Unoccupied property insurance can give you more flexibility, such as arranging a short-term policy, or accepting reduced cover, which would make it even more affordable compared to a renovation insurance policy.

It is worth noting however that unoccupied properties are still considered higher risk than occupied homes, with them being more susceptible to leaks, break-ins and vandalism, so whichever option you choose, the cost is likely to be higher than you’d pay if it was occupied.

If you are planning any kind of renovation, it’s recommended to speak to your current company so they can make the necessary arrangements for you:

  • painting, decorating and improvements such as a fitted bathroom or kitchen, for example, may be considered straightforward enough that you won’t need a specialist policy, unless you’re leaving it empty for longer than the allowed period. If you are going to be out for longer than 30 days, an unoccupied property insurance policy will probably be sufficient.
  • if you are building an extension however, many standard insurance policies specifically exclude loss or damage arising from these works or cover for the extension itself. While this will usually be covered by your contractor, you may want to consider renovations insurance, which will give you some cover for the part-built extension if it suffers damage that the contractor wasn’t responsible for.
  • if major building works are planned, especially if the property is going to be uninhabitable, your current insurer may no longer be prepared to cover the risk, and the amount of work could be too much for an unoccupied property to accommodate. In this instance, you will almost definitely need a renovation insurance policy.

If you’re not sure which option is most appropriate for you, we are well-placed to advise you. Give us a call on 0800 612 9376 or click “Get a Quote” to complete our online form. We will go over your requirements and arrange a policy that will suit your needs.

Need some more information?

Why not read one of our other renovation insurance guides?

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