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Thinking about a property renovation? Then you need property renovation insurance

Clearly, a good deal of thought needs to go into any decision to renovate or extend your home, but less stock is put in the property renovation insurance needed to go with it. The additional space, for instance, might be especially welcome to meet the needs of a growing family and help to increase the value of your home if you ever offer it for sale.

At the same time, beware that more bedrooms in your house does not necessarily mean a higher market value. More bedrooms might actually lower any asking price, warns the Telegraph newspaper, since buyers are more likely to be attracted to a three-bedroom home with two bathrooms rather than a four-bedroom house with just one bedroom.

The devil is in the detail

Although the major decisions about the nature and scope of the renovations you are planning are clearly important, some of the apparently minor considerations might prove just as critical.

Insurance is a particular case in point – get it wrong and you might put in jeopardy not just any renovation work or extension you are building, but the very structure and fabric of your entire home:

The need for property renovation insurance

  • unless the work you are planning amounts to no more than a little cosmetic painting and decorating, you need to inform the insurers of your home about any renovation or extension;
  • the reason is straight forward – any building work likely to have an impact on the structure and fabric of your property increases the risk of loss or damage;
  • because of these additional risks, your current insurer may charge an increased premium or remove cover altogether if you are making significant renovations or adding an extension to your home;
  • unless you arrange specialist renovations insurance in its place, therefore, you risk leaving your home without the necessary safeguards and protection of suitable insurance;
  • what you are likely to need of your renovations insurance is cover against loss or damage to the new building works – sufficient to cover the cost of their complete reinstatement if the worst comes to the worst;
  • but the existing structure and fabric of your home also needs to be covered – with a total building sum insured that covers the potential cost of completely rebuilding your home;
  • public liability cover may also be especially important during the course of any renovations – the danger of personal injury or property damage to visitors to the building site, passers-by and other members of the public may be significantly increased, and indemnity cover of at least £1 million is typically included in renovations insurance;
  • a source of some confusion – and potentially painful costs – is the question of continued insurance cover if your property has to be vacated during the course of any building works;
  • even though there may be someone working there every day, and even if you are onsite throughout the day, most insurers are likely to regard the property as unoccupied unless you are actually living and sleeping in it;
  • once your property is considered to be unoccupied, you are likely to find that the level of insurance cover drops significantly;
  • renovations insurance, therefore, typically includes provision for the necessary unoccupied property insurance.

If you have the builders in to make renovations to your home or to add an extension, it may be important to remember that special care needs to be taken on maintaining insurance cover.

Further reading: GSI Insurance Guide to Property Renovation Insurance.

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