Are you thinking of building an extension to your home or doing some significant renovation works? If you are, it's worth giving some thought to the implications of the project on your home insurance.
Most standard home insurers have a condition stating you must notify them before renovating, refurbishing or extending your home if the works are in excess of £25,000. Although, even once you have notified your insurer, they may then decide to limit the cover on your home or even cancel the insurance policy altogether. This could leave your home, often your most valuable asset, unprotected at a vulnerable time.
Home insurers are often unable to insure the home if it is undergoing building works because the risk has materially changed. The home effectively becomes a building site and this presents a different set of risks to the insurers. For example, third parties such as builders and other contractors may have access to the property. There could be the use of heat during the works along with doors, windows and roofs being removed.
It's important to use a specialist insurer that can cover buildings, contents and liabilities during the project. You must consider scenarios, unrelated to the works, that can affect your home such as the breakout of a fire, storm or escape of water damage. You should also review your mortgage documentation. Not having insurance on the structure of your home when renovating it could lead to a breach in your mortgage conditions.
Whilst it's important to ensure that the structure of your home remains insured during renovations you should include cover for the contract works. We advise our clients to remain in control of the insurance arrangements for their home and the contract works. We advise not to rely on a contractor’s insurance to provide adequate cover. A contractor could cease trading half-way through a project, or they may not have renewed their policy. Their limits of cover may be insufficient or they may have conditions in their policy to which they aren’t adhering, and that could leave you exposed. There may also be grey areas in the event of a claim with two sets of insurers (and possibly loss adjustors) to negotiate on what is contract works, and what is part of the original structure.
Our team works with homeowners, architects and project managers to deliver tailor-made policies from flexible and specialist insurers. These policies take into account specific features of the existing structure of the home, its contents and the contract works. Also included are requirements set out by JCT contracts where applicable, under one ‘all-risks’ policy.
Our clients’ homes are often their most valuable asset with rebuild values above £1m. They have many things to think about when planning works and insurance is often overlooked. The cost to take out a specialist policy to cover your existing structure and the contract works should be considered as part of the cost of the project. Our ability to advise how to protect the existing structure and insure the contract works under one policy ensures no gaps in cover or grey areas. This allows a cleaner and simpler claims process should an unfortunate event occur.
If you'd like a no-obligation review of your insurances before starting a project, please get in touch with us here.
Private Clients Development Executive