Home Renovation Insurance
Getting the right renovation insurance in place when you are planning building or extension works to your home or property is absolutely paramount. This is especially true when dealing with high value properties. There are many ways to insure a property whilst works are ongoing, and much depends on the insurance company you are with and the level of renovation works you carry out.
It is likely that your home will be your most valuable asset and insuring it correctly, whilst undergoing building works, should be as important as picking the right contractor or architect. An experienced Insurance Broker, like McLeod Insurance can talk through the options with you.
How Building Works Were Historically Insured
As recent as 5-7 years ago, they only way to insure a major building works project at your home was to take out a commercial building works policy. The policies were often limited in cover and used language that only a commercially minded individual could understand.
As home renovation increased in popularity, the home insurance market started to write this niche area of insurance. This helped Clients maintain a similar level of cover, often with the same insurance company that their standard household policy had been insured.
Opening up to this area of renovation insurance also made commercial sense to the home insurance companies, as they did not need to lose a client during the works period, in the hope they would return on completion. A seamless insurance option was now available.
Renovation Insurance Policy – Insuring Your Property Via Your Existing Home Insurance Company
It may be that a low level of work and/or works where you still occupy your premises, can be insured via your existing home insurance arrangement. Most Insurance Companies will have a works value limit that they will be comfortable to insure up to. If you have a High Net Worth Insurance policy then the limit may be in the region of £100,000.
Insuring Your Property Renovations Via A Specialist Building Works Insurance Company
Once you get to a works value that exceeds your existing insurance company’s threshold, it will be necessary to seek the services of a specialist home works insurer. This will usually be via a Broker. Here at McLeod Insurance we are specialists in high value home renovation insurance.
Depending on the level of works, and whether the property will remain occupied, will depend on the level of cover available. A Broker will try and find you the broadest cover possible for your risk, at the most competitive premium.
Insuring Your Property Renovations Via Your Contractor
Relying on your contractors insurance policy to respond in the event of a loss is a huge risk. Whilst the cover is unlikely to be as broad as arranging a policy yourself, the following should also be considered:
• You are trusting your Contractor’s renovation insurance to respond in the event of a claim and negligence will need to be proven on the Contractor’s part.
• If your Contractor provides incorrect information to their insurer (whether intentional or in error) then their policy may become invalid.
• Your Contractor may forget to renew their insurance policy.
• If your Contractor has a number of jobs running concurrently then the combined limit of cover may be exceeded. This may result in any insurance claim only partially being settled.
• Contractors insurance is often limited in cover compared to arranging a specific building works policy via an experienced Broker.
• By insuring yourself you retain control over the insurance during the works, helping give you peace of mind. Why gamble with your most valuable asset?
The above is not a definitive list but gives an idea of why taking the time to arrange the building works insurance gives you more control.
Basement Works – Renovation Insurance Cover
Adding a basement to your property, usually in London, can considerably increase the square footage and value of your property. It is quite often a cheaper alternative to moving to a larger house. Where homeowners cannot build up, or out, a basement may be the only option to remain in the same house.
There are horror stories regularly in the press, about problems caused when incorporating a basement into a property. Again, ensuring the correct insurance is in place is paramount before any works begin. Speak to your Insurance Broker at the earliest opportunity to ensure the correct insurance is in place.
Non Negligent Liability Insurance
Construction is a dangerous process and protecting yourself is paramount.
When the work you are arranging is going on close to other structures there is a chance that damage can occur to those structures, even if care is taken.
The Contractor should be taking out a policy that protects them, and you, in respect of any expense, liability, loss or other claim that may occur as a result of the building works at your property.
There are a number of activities (not limited to the below) that can give rise to the potential hazards covered by this insurance:
• Underpinning
• Property in poor condition
• Piling and foundation excavation (especially for basements)
• De-watering the ground
• Shoring of walls
Related information:
Talk To An experienced Renovation Insurance Broker, like McLeod Insurance And Discuss Your Best Options
Should you require any help or assistance with any of the topics covered above or would like us to give you a free consultation on your home insurance please do not hesitate to get in touch. We are always happy to help.
Richard McLeodDirector at McLeod Risk Services LLP
Top tip
Keep photographs of every room of your house away from your property, or on a cloud. In the unfortunate event of a total loss, this could significantly expedite your settlement.