The Covid-19 pandemic has seen a rise in all manner of home improvements, including building works, whether it be extensions, home renovations, or re-decoration work. Here, we outline the importance of considering Renovation insurance cover when carrying out such work on your property.
Building works rarely run as planned, with over 87% going over-schedule and 92% over-budget*. It is, therefore, crucial to ensure you have the right cover in place so that you don’t end up under-insured should anything go wrong.
A common misconception is that your home insurance will continue to cover you while you undertake work but the truth is that most insurers will exclude any structural work. In addition, whilst most contractors will have insurance for the works carried out on your home, it might not protect you in all circumstances, leaving some aspects uninsured, including:
- Damage to the property caused by a contractor’s negligence
- Burst pipes
- Fire
- Storm damage
- Damage to the property or your possessions because of an open roof
- Theft
Don’t rely on your contractor’s insurance
It is important to be aware of the dangers of relying on your contractor’s insurance. Here we list some of the key areas of concern:
- Your contractor goes out of business and their insurance is cancelled
- You have a falling out with your contractor and they leave, taking their insurance with them
- Your contractor fails to pay their premium and so their insurance fails
- Your contractor’s insurance may not be with a reputable or stable insurer, or one that is even still in business. For example, Gable AG went into liquidation with a number of UK clients being unaware, leaving them operating without insurance
- You are a third party in the event that a claim has to be made against your contractor’s insurance and, as such, the insurer will have no interest in paying out quickly
4 Things to consider before carrying out renovation work on your property
It’s important to consider the below areas before carrying out works on your property:
- When an extension is knocked through to join a main residence, what is works and what is existing structure? This will determine what insurance covers any potential claim.
- Which insurer is going to pay, and in what proportion, in the event of a claim which impacts the existing and new part of the building – your home insurance or your contractors’?
- Who is going to pay to put it right if there is an incident in the main residence, which has an impact on an extension, but is not the fault of the contractor? You have to consider that your household policy won’t cover it as they won’t be covering any aspect of the works carried out.
- What if the contractor carries out work outside of their remit and this results in a claim? In this circumstance, their insurer won’t pay and neither will your household insurer. An example of such a case can be seen here.
How Renovation Insurance can help to protect you
As we’ve outlined above, it is important not to rely on your home or contractor’s insurance when you are having work carried out on your property. However, Renovation Insurance can provide cover for:
- Any accidents, injuries, malicious damage, fire or theft, and will cover the entire job until its completion
- Unfixed materials – for example, if you have a kitchen or bathroom delivered this would not be covered by your home policy until it becomes fixed; these items also tend to be theft attractive as they are easy to resell
- Non-negligent third party liability; this reacts when damage is caused to a neighbouring property but the contractor is not negligent. This is most prominent when conducting works on an attached or terraced/townhouse property.
- Increased building costs if there is a claim during the works; this could also include architect fees to renew plans or reapply for permission.
McClarrons Affinity can help you with renovation insurance
At McClarrons Affinity, we take responsibility for your cover; we will assess your requirements by asking the relevant questions upfront to ensure there are no surprises in the event of a claim. If you are planning to carry out works on your property, speak to us about the cover you should be considering first by calling 01653 697055 or by emailing affinity@mcclarroninsurance.com.
*Source: Renovation Insurance Brokers based on 5,400 policies underwritten between 2011 and 2015
