Does Renovation Impact Home Insurance Policies?

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Are you planning a renovation on your home? You wouldn’t be alone. If you weren’t spending the entirety of 2020 planning a home renovation, you know you were actually acting out these fantasies. A lot of game rooms, home cinemas, she shacks, swimming pools, new kitchens and other renovations suddenly popped up across the country, with people having too much time on their hands and too many ideas offered by social media. 

But have you considered the insurance that comes with home renovations? You can learn something from those half-made structures that might have resulted in a new place to hang out in, but also might have resulted in a broken leg or a damaged home structure: get some insurance. 

But aren’t these projects covered by your home insurance? Well, it depends. Read on to find out exactly what renovations are covered by your home insurance and what isn’t. 

IMAGE: https://unsplash.com/photos/GDWmu0bFfS4 (Unsplash) 

Are renovation issues covered by home insurance? 

There are many types of home insurance policies, and they cover a range of scenarios, but when it comes down to it, a lot of home insurance policies will cover a vast majority of home renovations up to a point. 

Smaller projects, such as rewiring, plumbing, internal structural changes, refitting bathrooms, and kitchens, etc. might also be covered by home insurance, however you should check with your insurer before you go ahead with the project to be sure. 

If you are looking into more extensive work, we’re afraid to say you probably won’t be covered by home insurance. Only 18% of 322 building insurance policies listed by Defaqto included a minor building works limit, which is what you’re looking for if you want your home renovation project covered by your home insurance policy. 

Renovations that will increase your home insurance rates 

However, certain projects can have a negative or positive effect on your insurance premiums. 

Building a swimming pool, adding an office for a home business, expanding your space, or upgrading your bedroom and bathroom are all likely to send your premiums going up. All of these things might increase the aesthetic of your home, making it more valuable, but they have their drawbacks. Pools, for example, have been deemed an “attractive nuisance” by insurers because your liability risk will rise, and your premiums with it, due to the higher risk of injury. Expanding your space causes you to have a higher dwelling coverage, having a home office brings into question protection against crime and worker injuries, and more valuable materials in kitchens and bathroom upgrades will mean a more expensive kitchen to insure. 

Renovations that will decrease your home insurance rates 

But there are also things that bring your home insurance premiums down, like renovating or replacing your roof, upgrading your plumbing or wiring, or adding security systems or sprinklers. This is due to the fact that this is more about safeguarding your home rather than making it more aesthetically pleasing. Insurers are likely to reward upgrades like this, which will offset any future problems, with lower premiums. However, you might want to contact your insurer to be sure of any changes and their effect on your premiums to be sure you can afford not only the work but the aftercare. 

Is there an alternative? 

Well, it turns out there is. Instead of relying on your home insurance to cover any damage you might inflict while you’re renovating your home, you can take out a home renovation insurance policy. This is specifically designed to cover more extensive work to your home, so think bigger than cosmetic work such as bathroom or kitchen refits, such as extensions or restructuring. 

Like any other form of insurance, the details might vary from insurer to insurer, but you can expect policies that cover things like, damage to the existing structure of the property, the damage or loss of the possessions in your home or even if you are keeping possessions inside a storage unit, and the theft of any building equipment. It will also cover a replacement source of accommodation should your home become unlivable due to something going wrong, like drilling into a pipe and flooding the place, public liability to cover you for any accidents to others, which will be handy if you are having tradesmen doing the work, personal accident cover for any injuries to yourself if you decide to DIY the job, cover for legal expenses should any number of things result in a lawsuit, and accidental damage, should someone spill white spirit on the carpet or break a window to cite just a couple of examples. 

But there is the question of a DIY approach. Are you covered if you do the work yourself? Well, there you might come into an issue. Home insurance claims aren’t a fan of DIY, and it will depend on the scale and nature of the job to see whether you will be covered for the job. If you have a small job to do, like putting up a shelf, your insurer doesn’t need to know, but they will be interested if you are looking to deal with a load bearing wall for example. If you’re not sure, simply call your insurer to be sure. 

The scale of the job also correlates to your experience and qualifications. If you drive a nail into a pipe by accident, you’re likely to be covered for something so minor that even the pros do, but if you, who has never even hung a photo on the wall before, attempt to knock down a wall and rebuild, you will be responsible for paying to put things right if you get them wrong. 

Conclusion 

If you are looking into doing extensive work to your home, you might want to look into home renovation insurance. If you’re looking for something more than redoing your kitchen or there are changes occurring to the structure of your home, you will want to upgrade to home renovation insurance in order to protect not only your home, but the people working on your home. 

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