21 May 2024

Help! Do I need home insurance or renovation insurance?

By Renovation Plan

If you’re considering renovation work on your home but remain unsure whether standard home insurance will cover you, in this article we explain why taking out renovation insurance is usually the best bet for a more secure building project – especially if there’s a problem or delay.

The rise of home renovations

There’s been a real spike in people electing to transform parts of their home through renovation. While most of us are not quite in the league of Channel Four’s Grand Designs, or even Love It or List It, the popularity of these programmes has given many people the impetus to improve rather than move. Or even the opposite – move THEN improve! From opening up your downstairs into one big space, to removing a fireplace or cornices, there’s a host of popular renovations to consider. But there’s more to think about than booking the builder and warning the neighbours of likely noise and disruption. There are two critical insurance questions to ask yourself.

  • Have I informed my home insurance provider of the intention to make changes?
  • Does this level of work require specialist renovation insurance?

Let’s start with a reminder of the key function of home insurance.

What does standard home insurance and contents insurance cover?

For a homeowner, home or buildings insurance is essential, alongside contents insurance. With a comprehensive home insurance policy, the general structure of your property is protected, including the roof, walls, and floors. It’s also typical for all permanent fixtures to be covered, such as fitted kitchen cabinets, fitted wardrobes, and your bathroom suite. Contents insurance is designed to protect all items that are in your home but not a physical part of it, such as furniture, furnishings, fabrics, and electrical goods.

In addition to the above, the majority of home insurance policies will protect and pay out in the event of fire, flood, theft, escape of water, and storm damage – but of course, always read the small print to ensure that you’re covered.

There are also minor decoration and home improvement jobs that may be covered under your standard home insurance, including small DIY fixes and redecoration.

What standard home insurance doesn’t cover

The broadest term for this would be renovations costing over £20k, which includes loft conversions, building extensions, or a complete rebuild or remodel of key property features like a stairway or kitchen. And it’s not so much the initial plans that may cause the issue – it’s the work involved and problems that may ensue. And that’s why specialist renovation insurance is recommended.

What is renovation insurance, and what does it cover?

Renovation insurance is the cover required to mitigate for all risks, whether that’s structural damage during a build, cover against injury for those carrying out renovations, or theft of materials and fixtures & fittings. There are usually different levels of cover available, such as the selection offered by Renovation Plan,  depending on the type of project and length of time the renovation will take.

The key things a good renovation insurance policy should cover are:

  • Damage to the new building and existing structure as a result of fire or flooding
  • Theft of building and renovation materials, tools, and equipment kept at the property
  • Theft of unfixed materials and fittings (for example your new kitchen and bathroom waiting to be installed)
  • Damage to neighbouring properties caused by your renovations
  • Protection for your property if it’s left unoccupied (which is often the case during an extensive and lengthy rebuild)
  • Public liability cover in the event someone is injured at your property while renovations are being carried out
  • Damage caused by subsidence, heave, or landslip during the works

At this point it’s important to reinforce the caveat that home insurance alone is not sufficient if any or several of the situations above occur.

And while it’s not a statute of law, limitations in your home insurance policy could make a possible claim very difficult if you haven’t taken out a suitable policy.

“You’re not legally obliged to have renovation insurance, but if your home insurance policy is restricted during your project, you may have an exclusion that applies when damage is caused by the works, or your existing policy may actually be invalidated by structural works.“

“In this case, you will be relying on your contractor’s public liability policy to cover any potential loss. This could cause problems as it would only provide cover in the event of the contractor being negligent. The contractor would also not be providing cover for any existing structure which is there at the moment (i.e. your existing home itself).”

Brooke Crisp, Manager, Renovation Plan

What is the additional cost of renovation insurance?

Even if you’re concerned that your renovation is about to blow the budget, that’s not a reason to overlook renovation insurance. Think of it this way….if you’re faced with having to make a claim (for example, tools and materials have been stolen), then if you don’t have adequate cover, you’ll be paying out a whole lot more than if you’d taken out renovation insurance.

Talking to your renovation insurance specialist

Once you’ve decided to do the sensible thing and take out renovation insurance, there are a few essential steps that we call the super six steps to success.

  1. Before accepting a quote, shop around the insurance specialists and ask the difficult questions – namely, what exactly will be covered? Cheapest isn’t necessarily the most comprehensive.
  2. Understand your budget – you need strict limitations and also to know where there is “wriggle room”.
  3. Have you seen previous examples of work from your builders? Get proven testimonials, view completed projects, and check on recommendation websites for reviews.
  4. Also check that your on-site workers have their own public liability cover. We recommend at least £2m of public liability cover as a minimum.
  5. Have you taken into account home security? Do you have alarms and cameras set up to protect your property during the times when it’s unoccupied? People often move out during an extensive building project, making it more important than ever to have the right security measures in place.
  6. And finally… even if you think you have everything financially covered, we recommend that you have a contingency budget. This is always prudent in case costs do escalate or a job overruns.

Ideally, all conversations with an insurer should happen before renovation work is agreed – even if you have an existing renovation policy. Your insurer, aside from providing a quote, can ascertain whether that cover can be provided. A new building job is exactly that – and if you don’t disclose the details, your policy may be invalid.

We’d like to end on a positive note. Renovating your home, whether that’s a small change or major transformation, is a lovely thing. You’re personalising and maximising your living space and investing in the future of your home. But delays occur, accidents happen, and suppliers or contractors may let you down. That’s why the correct renovation insurance should not be a “maybe” and always be a “must have”.

Get help with renovation insurance from Renovation Plan

Find out more about the benefits of renovation insurance by calling one of our experts today on 01621 784840.

And if you’re ready for a quote and cover, make sure you have as much project information to hand as possible.