House renovation insurance in 2023. What is home renovation insurance?
House renovation insurance
Your homeowners' insurance premiums depend on factors like your home's size, condition, and location.
Furthermore, the cost to rebuild your house also determines the amount of your home insurance, so what happens if those factors change?
Suppose you add an extension or update the fittings in your bathroom. Will your homeowners' insurance cover renovations?
If you plan to renovate your home, here's what you should know about house renovation insurance.
Table of contents
- What is home renovation insurance?
- Are renovations covered in my home insurance policy?
- What renovations are not covered by standard home insurance?
- What does home renovation insurance cover?
- Should I inform my home insurance agent about renovations?
- What will my insurance provider want to know?
- House renovation insurance FAQ
- House renovation insurance cost
What is home renovation insurance?
Renovation insurance protects your property when you're carrying out renovation work on your home.
Home renovation insurance would cover the costs incurred if any mishaps occur, such as a serious fire, structural damages, theft, or injury to those at the property.
Home renovation insurance covers home renovation projects from a loft conversion to refitting your bathroom or extending your house to build a music studio.
Are renovations covered in my home insurance policy?
Most standard homeowner policies only cover minor renovations such as redecoration and DIY. To ensure you are covered for other renovations, you should contact your home insurance provider before you start working.
Depending on the renovation type you're carrying out, your insurer might need to amend your coverage. However, that isn't always the case. You may be able to proceed with renovations without changes to your policy, but it's always a good idea to check.
It's even more important to check if your property is a "listed building." Listed buildings often require certain costly materials for repair and renovation work.
What renovations are not covered by standard home insurance?
Most standard home insurance policies will not cover major renovation works. Major renovations increase the riskiness of the work and therefore increase the chances of mishaps and the need to make a claim.
Some of the risks not covered by standard home policies are:
- Personal and third-party accidents
- Theft of your contents and building materials
- Accidental damage to your building and contents
- Legal cover if you have any problems with a construction company completing a job
If your existing home insurance doesn't cover you, you will need home renovation insurance to cover your renovation projects.
What does home renovation insurance cover?
In contrast to standard homeowners' policies, home renovation insurance or comprehensive coverage is designed to cover you during the whole process of renovation work, from start to finish. Most policies cover the following:
- Theft or damage of your possessions
- Theft of building materials, tools, and equipment
- If your property is vacant for more than 30 or 60 days
- Structural damages due to subsidence or a landslide during renovation
- Damage to neighboring properties (caused by the renovations)
- Damage to your home and contents during renovations, including fire and flooding
- Public and employer's liability cover in case of injury during renovations
- Legal cover to protect against disputes with tradespeople completing the work
Note: Once your renovations are complete, most renovation policies can continue to cover your home, but a standard home insurance policy might be preferable.
Should I inform my home insurance agent about renovations?
While it can seem inconvenient, you should tell your home insurer about any building work. Without checking, you risk invalidating your existing policy.
Checking with your agent before the project gets underway will ensure you will be adequately covered during and after the renovation.
There are two key reasons to inform your insurance agent:
- A renovation that increases your home's rebuilding costs could leave you underinsured with your existing policy.
- Your existing liability limits might not be sufficient if someone gets injured during your renovations.
Informing your insurance agent saves you from any hassle and financial disaster if issues should occur.
What will my insurance provider want to know?
Once you have told your home insurance provider about the renovation you have planned, they will ask you questions to help determine what level of risk the work poses to your home.
Your insurance provider may ask questions surrounding:
- The estimated cost of the renovation work
- How long you expect the renovation will take
- Whether you are doing the renovation yourself
- The name of any businesses, builders, or contractors you're hiring
- If the contractors you will hire have public liability insurance
- Whether the property will be vacant while the work is underway
Home renovation insurance protects your property when you're renovating your home.
Your existing home insurance policy may cover small renovations, but any significant renovations could leave you underinsured.
In contrast to standard home policies, home renovation insurance would cover the costs incurred if any mishaps occur during major renovations.
You should verify that any hired contractors have adequate insurance, including liability insurance and workers' compensation coverage.
Before renovating, consider increasing your liability coverage limits in case someone gets injured, or you suffer structural damages to your property.
Speak with your home insurance agent about your renovation plan to determine if you need to change your coverage limits.
House renovation insurance FAQ
Do I need to change my home insurance to make renovations?
If your renovations are estimated to increase the cost of rebuilding your home, you'll want to increase your homeowners' insurance coverage limits.
For example, if you add an extension or extra rooms, you'll likely need higher "dwelling coverage." To determine if you have adequate coverage, speak with your insurance agent before renovating.
Does my home insurance cover me to add a detached structure?
While renovating your home, you might add a detached structure to your property, such as a shed, garage, fencing, or gazebo.
Generally, a homeowners' policy will cover these types of detached structures under the "other structures coverage" portion of the policy. However, check your policy for exclusions.
Am I covered if I do the renovation work myself?
The answer to this depends on the scale of work you are undertaking and the type of alterations you want to make to the existing property.
As a rule of thumb, being unsure whether you're covered indicates you need to contact your insurer.
Your home insurance will likely cover most minor mistakes if it covers accidental damage, such as breaking a pipe. However, a self-build insurance policy will cover you for larger structural changes.
Should a building contractor I hire carry insurance?
Yes. If you hire a contractor to renovate your home, ensure they have the right insurance. Generally, a contractor should carry property, liability, and workers' compensation insurance.
You can ask for a copy of their insurance policies to confirm this. Moreover, you can ask them to send you a copy of each for your records.
You could get sued if the contractor gets injured while working for you, so it's wise to ensure that anyone hired to work on your renovation is adequately insured.
If a prospective contractor can't verify their insurance coverage, you can refuse to work with them. It's safest to find a contractor that is fully insured. If they hire subcontractors, make sure they have the proper insurance also.
It's important to note a standard homeowners' policy won't protect against poor workmanship. Home insurance typically excludes losses caused by inadequate, faulty, or defective workmanship.
For example, if your contractor improperly installs your kitchen fittings, you can't get that fixed by filing a claim with your homeowners' insurance. If the contractor is unwilling to fix their inadequate work, you will need to file a lawsuit against them.
What will happen if I don't have insurance for renovations?
Depending on where you live, there could be serious consequences if you or your contractor are not insured.
For example, if your renovation fails to follow local building codes, local authorities could shut your renovation project down. A city inspector could require you to start over even after the structure is complete. Moreover, failing to get insurance could also cause further issues.
A standard home policy typically excludes problems associated with an "ordinance of law." Therefore, you won't be able to file an insurance claim to pay for rebuilding the structure after starting over. You'll be left to cover the financial losses.
Will my home insurance premium go up?
The answer to this depends on what renovations you have done. Suppose you build an extension that adds extra rooms, fixtures, and fittings to your home. This change may increase your premiums as the cost to repair and rebuild your home (in case of a claim) is likely higher.
In other words, a home renovation could cause your home insurance premiums to rise, but it’s not always the case. It depends on the renovation projects that are carried out. Projects that increase your home's value may lead to higher premiums.
What if I accidentally flood my home while doing renovations?
Homeowners' insurance typically covers water damage from minor problems like a faulty dishwasher or a burst pipe.
Accidental leaks from installing new washing machines are usually always covered, whereas damage from frozen pipes can be covered, but not if you've neglected to keep your home heated.
Am I covered for a house fire during a renovation?
Generally speaking, home insurance covers you for risks such as fires while renovating, but there can be exclusions. For example, if you leave your home vacant for a certain period (as specified by your policy), you might not be covered.
What if I'm not living in my home during the renovation?
Vacant houses can cause issues with home insurance coverage. A standard homeowners' policy often excludes losses when a property has been vacant for two months (or 60 or more consecutive days).
This exclusion usually doesn't apply to homes that are under construction. Nevertheless, you might not be covered due to the “vacant house” category if you're not living at home during a renovation. You should check with your insurance agent to see whether your situation requires “vacant home insurance.”
Vacant home insurance can cover problems that affect vacant properties, such as vandalism, weather damage, and third-party injuries. It is also customizable to add further structures to the policy.
House renovation insurance cost
The market value of your home and your home's replacement costs are two different amounts.
The market value of your home is defined by the amount a buyer is willing to pay for your property in its current condition. The factors affecting the market value of your home are:
- Your location and the surrounding views
- The status of the housing market in your area
- Your proximity to police, fire, and medical facilities
- The quality of the local school systems in your area
- The shops, restaurants, and local amenities in your area
- If you have extra structures on your property, such as a garage
Your home's replacement cost is the amount it would take to rebuild your home with materials of similar kind and quality on your existing property, including:
- Clean-up and debris removal costs
- The labor costs to rebuild or repair your home
- The items needed to rebuild fittings, ceilings, walls, floors, doors, windows, roofs, etc.
The cost of renovation insurance can vary depending on a variety of factors, including:
- Who's carrying out the work
- The type of renovations
- The duration of the renovation
- The rebuild cost of your home
In general, home renovation policies don't have a fixed rate. Shopping around is the only way to get an accurate idea of the cost.
Make sure you're honest when buying home insurance or renovation insurance. Give the insurance provider as much detail about the renovations as possible to ensure you're covered for the work you have planned.
House renovation insurance quote
Your home is your most valuable investment, and failure to insure it properly can cause significant financial problems. That's why we offer tailor-made home insurance policies to protect your house and its contents.
Look no further if you're looking for a home insurance policy to cover your home improvements. Pitsas Insurances can guide you to find home insurance according to your specific needs and budget constraints.
We offer basic, extensive, and comprehensive home insurance coverage.
If you're planning to start a renovation project, speak with one of our insurance specialists. They can let you know how your renovation work will affect your policy.
To receive a free home insurance quote, see here.