What does renovations insurance cover?
If you’ve got a large renovation project planned, you may find that you’ve had to arrange a specialist renovations insurance instead.
What does renovations insurance cover?
This is because the risk to the insurance companies is different for a property undergoing renovation, and they will want to ensure they are collecting the right premium, and applying the right terms. While this may seem like an excuse to put your price up, the aim is actually to make sure that you’re not paying extra for something that is already covered elsewhere, and arrange something best suited for your requirements.
An important thing to highlight straight away, is that renovations insurance is not designed to cover for negligence, faulty workmanship, or damage as a direct result of any renovations taking place.
If a contractor is doing the work for you, they should have public liability insurance in place. This protects them from any damage they cause to any other person or property, i.e. you, your family, and your home.
If you’re doing the work yourself and cause damage, you’re unable to claim from your own policy – You would effectively be trying to sue yourself for damage caused. While doing the work yourself may save you a lot on labour costs, it is worth getting your work checked by experts unless you’re in the trade yourself. The absolute safest way to proceed is to employ fully insured contractors.
Once you have chosen whether to use contractors or undertake your own project, there are two types of insurance policy you can arrange.
Existing Structure Only
On the face of it, this sounds relatively self-explanatory. The insurance only covers the property as it was before works start.
This is particularly common if you’re using outside contractors, and as we’ve already touched on, they should have public liability insurance for any damage they cause. This policy can also extend to cover for their tools, and any accident or injury they may sustain while they’re working.
It is also common for contractors to arrange a “Contractors All Risk” insurance. This covers for a specific project, or contract, and certain aspects in connection. This can include any works in progress, and any building materials that may have been purchased.
Essentially, a building contract will tend to state that partly finished work, generally known as works in progress, remain the responsibility of the contractor until they sign off their work at the en, where a certificate of practical completion is issued. That would mean that if a half-finished extension was lost to a fire for example, the contractor’s insurer would reimburse for the time, labour and materials that went into it.
It may be surprising to find that with renovations insurance, often the renovations themselves aren’t covered by the property insurer, as the cover is in place elsewhere. The benefit for you is that you’re not paying extra to effectively insure the same eventualities twice.
Work in Progress
If you’re project-managing the renovations yourself, or your contractors do not have sufficient insurance in place (maybe you know a former builder who has since retired) you might consider opting for a policy that covers work in progress instead.
Work in progress insurance carries a higher cost with it, largely due to the amount of cover being offered. For example:
Your house currently costs £200,000 to rebuild. You’re planning an extension costing £100,000. The total amount being insured for with work in progress is £300,000 in this example, so an additional 50% on top.
Not only do you need more cover, but less insurers can provide a work in progress policy. This may limit your options, provide less competition, and may result in a higher rate too.
As we said right at the start of the page, work in progress still doesn’t cover for any faulty workmanship or damage caused by the works themselves. It’s instead designed to cover any part of the project that is damaged due to another cause, such as a fire or storm damage, as well as any building materials that could be damaged and stolen before they are fixed in place.
Regardless of which option you choose, once works complete and the project is signed over to you, the next insurance policy you arrange should take into the account the revised rebuild cost if you’ve added size and value to your home.
GSI Insurance Services (Southern) Ltd. are experts in providing renovations insurance, and our experienced advisors are on hand to meet your requirements. If you know the policy you need, or want some advice first, we would be delighted to speak to you. Give us a call on 0800 612 9376 or click “Get a Quote” to complete our online form.
Need some more information?
Why not read one of our other renovation insurance guides?
- Renovation Insurance
- I’m redecorating – Do I need specialist insurance?
- Tips on renovating your property
- Renovation insurance or unoccupied insurance?
- Subsidence cover during renovations
- How can I renovate my home?
- When do I need renovations insurance?
- JCT Contracts and Renovations Insurance
- Renovation Insurance Guide
- Renovation Insurance FAQs
- Case Study – Renovations in the UK in 2020