Renovating your home this year? Make sure you’re covered!

Here at PIB Insurance Brokers we recognise the importance of correctly protecting you whilst carrying out a renovation project of your home and we are pleased to announce the creation of a specialist team who will support you through the complexities to make sure your home and contents are protected whilst you undertake this large financial investment. Don‘t be left with a large personal loss if your insurance cover is not adequate.

It is unlikely that your standard home insurance policy will cover your home during a renovation project, so additional cover is essential to cover your property and contents during a time when more risk is involved.

The likelihood of serious problems during renovations is not rare, and without the correct cover, it can be very costly to put things right. We answer some of the common questions often asked by those embarking on a renovation project.

My builder has insurance, am I protected?

Just because your builder has some insurance this does not mean it will cover you for any problems that could occur with your specific project or that their insurers will pay. Damage may occur to your home that is not the result of the builder’s negligence even though it is still caused by the renovations – for example, a wall cracking as an old extension is demolished. In this situation, the builders have not done anything wrong, so their insurance will not cover the resulting damage.

Although your builder’s liability policy should cover damage to the structure or works that results from his negligence, it will not cover things like storm or theft damage, subsidence, flood, malicious damage and so on. Your home insurance should continue to cover these kinds of things – if they have specifically agreed to, but most will not if they are not advised or have excluded such damage if you have told them.

Will my home insurance cover any damage to the building?

If your contractor causes damage to the building, accidentally or not, your normal home insurance will not cover you.

In fact, unless you have told your buildings insurer that the project is taking place, and they have agreed to provide ongoing full cover, you are unlikely to be able to claim successfully for anything. Failing to disclose a building project would be considered non-disclosure of a material fact, and would entitle the buildings insurer to decline a claim. Even if you do tell them about the project, and they are willing to give you some ongoing cover, they will almost certainly exclude damage caused by the contractor and damage arising from the works.

Will my home insurance cover theft of any possessions in the building?

Your home insurance will not automatically cover possessions left in the building if you have moved out even if the house is occupied by builders every day. You will need to have told the insurer about the project, that you are no longer occupying the home and had explicit agreement that your contents cover would remain in place. There is no guarantee that your insurer would agree to this.

Is renovation insurance expensive?

Renovation insurance costs what it does because it is proportionate to the risk you face when carrying out renovations. Insuring your building during a renovation project is a completely different proposition to insuring an occupied home. The insurers are effectively covering a building site rather than a domestic home, which is a much riskier proposition.

The higher cost of renovations insurance is a clue. If serious problems during renovations were extraordinarily rare; then the insurance wouldn’t cost very much. Sadly they are not rare at all. But renovation insurance is also relatively expensive because if something goes wrong then it can cost a lot of money to put it right.

My insurers have agreed a level of buildings and contents cover, is that enough?

This might be fine up to a point, but there are often contractual requirements that a standard home insurer will not meet. In particular – your mortgage agreement and the joint names requirement under JCT contracts which requires the builder to be noted as a joint insured. This means that if damage is caused by the builder’s negligence, your insurers cannot recover their claim costs from the builder’s liability insurers. And because of this, your home insurers simply will not agree to this requirement.

This means you are likely to find yourself in a position where neither your own insurer nor the contractor’s liability insurer will deal with the claim. A home insurer will not meet a claim which has been caused by the contractor’s negligence, and the contractor’s liability insurers will point to the contractual requirement for joint names insurance which has not been met and also refuse to deal with the claim. JCT contracts are an essential component of renovation insurance.

If you are planning work at your home then please drop me or your normal contact at PIB an email or give us a call.