If you’re planning a renovation project, it’s important to have adequate insurance coverage to protect your investment. Renovation insurance, also known as home renovation insurance, covers your existing structure and building materials during building works. Most standard home insurance policies do not provide cover for substantial home renovations, and may not cover you if your property is left unoccupied during the renovation period.
In this guide, we’ll explore the different types of renovation insurance available and the benefits of each. We’ll also discuss the importance of having renovation insurance to protect your property, and provide tips on how to compare quotes to get a good deal on your insurance.
Types of Home Insurance Cover
If you are undergoing renovation work, whether it is simply structural alterations, a loft conversion, or general building works, you must ensure that you have adequate insurance coverage to protect both you and your property.
Contractor’s All-Risk Insurance
Contractor’s All Risk (CAR) insurance is a type of insurance that covers contractors and their work for accidental damage or loss. It is designed to protect contractors from the financial losses that can occur if their work is damaged or destroyed, either by accident or by malicious acts.
CAR insurance typically covers the following:
- The contractor’s own tools, plant, and equipment
- Materials and equipment that the contractor has purchased for the project
- The work that the contractor has completed, whether it is still under construction or has been completed
- The property of the client, if it is damaged by the contractor’s work
Public Liability Insurance
Public liability insurance is a type of insurance that covers businesses against claims made by members of the public for accidental injury or damage to their property. It is designed to protect businesses from the financial losses that can occur if they are held liable for an accident or incident.
It typically covers the following:
- Compensation for personal injuries, including medical expenses, lost income, and pain and suffering
- Compensation for damage to property, including the cost of repairs or replacement
- Legal fees associated with defending a claim
Homeowner’s Insurance
Homeowners insurance is a type of property insurance that covers the physical structure of your home and your personal belongings. It also provides liability coverage in case someone is injured on your property.
Homeowners insurance policies vary, but they typically cover the following:
- The structure of your home, including the walls, roof, and foundation
- Your personal belongings, including furniture, appliances, and clothing
- Liability coverage in case someone is injured on your property
- Additional living expenses if you cannot live in your home while it is being repaired or rebuilt
Existing Structure:
This insurance is a type of insurance that covers the physical structure of an existing building or structure. It is designed to protect the owner of the building or structure from financial losses if the building or structure is damaged or destroyed by a covered peril.
Covered perils typically include fire, lightning, explosion, windstorm, hail, earthquake, and vandalism. Some policies may also cover damage caused by water, theft, or other perils.
The cost of existing structure insurance will vary depending on a number of factors, including the value of the building or structure, the type of construction, the location of the building or structure, and the coverage limits selected.
Employers Liability
If you’re hiring a contractor to undertake building work, ensure they have Employer’s Liability insurance. This protects employers i.e. your builder from accidents or illnesses, should they occur whilst at work. It is a legal requirement in the UK.
Professional Indemnity
Professional Indemnity Insurance (PI insurance) is a type of insurance that protects professionals from the financial consequences of making a mistake in their work. It is designed to cover the costs of compensation and legal fees if a client makes a claim against a professional for negligence.
Professional indemnity insurance is legally required for some professions, such as accountants and lawyers. However, it is a good idea for all professionals to have this type of insurance, regardless of their industry.
You should ensure that any professional you hire carries PI insurance.
Non-Negligence Coverage
This type of insurance protects you against damage to neighbouring properties caused by your renovations, even if you were not negligent.
It’s important to note that the type of renovation insurance you’ll require will depend on the nature and scope of the work you’re doing. Always compare quotes from different insurers to ensure you’re getting a good deal, and ensure you understand any restrictions and insurance costs associated with each policy.
What Does Renovation Insurance Cover?
Depending on the type of policy you choose home renovation insurance cover a wide range of issues. In general, it can cover damage to your property and its contents caused by unintended incidents like fire, theft, water, or vandalism.
It may also include coverage for alternative accommodation if your home becomes uninhabitable as a result of renovations, as well as coverage for claims brought against you by members of the public who are hurt or suffer property damage as a result of your renovation work. Renovation insurance policies provide varying levels of coverage depending on the policy and the type of project being done.
Here are some examples of what house renovation insurance may cover:
- Property Damage: This covers the cost of repairing or replacing any damage caused to your property during the renovation project, such as damage caused by fire, flooding, or collapse of a structure.
- Bodily Injury: This covers the cost of medical expenses or legal fees in the event that someone is injured on your property during the renovation project.
- Public Liability Cover: This covers the cost of legal fees and compensation if someone else’s property is damaged or they are injured as a result of the building work.
- Theft: This covers the cost of replacing any stolen building materials or tools during the renovation project.
- Accidents: This covers the cost of medical expenses or legal fees if someone is injured as a result of an accident during the building work.
- Alternative Accommodation: This covers the cost of providing alternative accommodation for you and your family if your home becomes uninhabitable during the renovation project.
- Existing Structure: This covers any damage caused to the structure of your house during the renovation work, such as damage to the foundations, walls, or roof.
- Liability Cover: This covers the cost of legal fees and compensation if you or someone else is injured or their property is damaged as a result of your negligence during the renovation work.
- Specialist Renovation Insurance: This is a type of insurance specifically designed for larger, more complex renovation projects, such as extensive home renovations.
Overall, it is important to carefully consider your insurance options when planning a renovation project, as the costs of any accidents, damage, or theft can quickly add up.
Why Do You Need Home Renovation Insurance?
Home renovation insurance protects against accidents and meets legal requirements. Renovation insurance covers building works, including existing structures, public liability, property owners liability, and home insurance. During extensive home renovations, renovation cover may provide alternative housing. Most standard home insurance policies don’t cover house renovations or major home improvements. Renovation insurance protects against major fires and structural damage. Before buying renovation home insurance to cover your home during the renovation, compare quotes and understand any restrictions and estimated costs.
How to Choose the Right Renovation Insurance Policy?
Choosing the right home insurance policy requires careful consideration of several factors. Here are some steps to help you choose the right policy:
- Research and compare policies: Take the time to research different renovation insurance policies and compare their features, benefits, and rebuild cost. Look for policies that provide the coverage you need at a reasonable price.
- Review policy exclusions: Make sure you understand the standard home insurance policy exclusions before choosing a renovation home insurance policy. These are the events or situations that the existing policy does not cover, so it’s important to be aware
- of them to avoid any surprises later on.
- Consider your renovation project: The type and scope of your renovation project will determine the level of coverage you need. Consider factors such as the size of the project, the materials being used, and any potential additional risks or hazards.
- Review your contract: Make sure you read and understand the terms and conditions of the policy contract before signing up. This includes any obligations you have as the policyholder, as well as the obligations of the home insurance provider.
- JCT Insurance Options: Consider the Joint Contracts Tribunal (JCT) insurance options when choosing a renovation home insurance policy. These include the Minor Works Contract, Intermediate Contract, and Standard Building Contract.
Each option provides different levels of coverage and is designed for different types of renovation projects. Check out our handy graphic below to understand what types of insurance cover you might need:
Consider A Performance Bond
Performance bonds are surety bonds that guarantee a contractor will finish a project as agreed. The performance bond compensates the project owner if the contractor fails to finish or meet contract requirements.
Performance bonds are used in construction projects where a contractor is hired to complete a task or project on time. They are also used in industries where service providers may not deliver.
Performance bonds guarantee project completion according to the contract. They can reduce contractor default losses and delays. Project clients and main contractors often require performance bonds before the tendering or signing of a contract.
In conclusion, renovation insurance is critical when undergoing renovation. It protects against unforeseen accidents, ensures legal compliance, and provides peace of mind. Homeowners can choose the best renovation insurance policy for their needs by researching and comparing policies, reviewing policy exclusions, considering the renovation project, calculating re-build costs, reviewing contracts, and considering performance bonds.
It is strongly advised to obtain coverage before beginning a renovation project to ensure that the property and its contents are protected throughout the process. Don’t take the chance; get the coverage you need and enjoy your newly renovated home with peace of mind.