Do You Need Insurance for That Renovation?

When planning a renovation, ensuring you have the right insurance is essential. Whether you're hiring contractors or tackling the project yourself, renovation insurance can protect you from potential property damage or injuries that may occur during the work. If your renovation is minor and you’re confident in managing it safely, you might consider foregoing specific renovation insurance. However, it’s always a good idea to check with your current insurance provider to verify whether your existing policy covers renovations and to discuss any additional coverage you may need.

Examples of When You Need Renovation Insurance

Determining when renovation insurance is necessary can be confusing, particularly for smaller projects. You will need insurance if:

1. Structural Changes: Any alterations that involve structural changes, such as knocking down walls.
2. Inhabitability: If the renovation requires you to vacate the property, for example, during a full bathroom overhaul.

Other instances where insurance is necessary include:

1. Full kitchen remodelling
2. Complete electrical rewiring of the house
3. Building extensions or conversions

For purely cosmetic updates, such as repainting or replacing cabinets, renovation insurance is typically unnecessary.

Empty (or Unoccupied) Buildings Insurance Cover

If your property will be left unoccupied during the renovation, you’ll need either empty building insurance or site insurance. Standard building insurance often becomes invalid if the property is left empty for more than 30 days.

Empty buildings insurance generally offers two levels of cover: restricted and full. Restricted cover typically includes protection against fire, lightning, and liability, while full cover provides broader protection, including theft, flooding, and accidental damage.

Insurers usually require that:

• Regular inspections are conducted (at least every 14 days)
• Water systems are drained down and mains are isolated
• Electricity and gas supplies are shut off
• Waste is cleared and the letterbox sealed
• Security measures are in place, such as shutters in high-risk areas

What Should Site Insurance Cover?

Site insurance is often a cost-effective option for renovations. It should cover all risks to the building, including public and employer’s liability, and be in place from the moment you purchase the property or, if it’s your current home, from the day you move out.

Site insurance typically covers:

• New Works: All physical elements of the project, including the existing structure and temporary works.
• Public Liability: Protection for accidental damage to third-party property, but not for employees.
• Employers’ Liability: A legal requirement for contractors with employees; this covers injuries or fatalities.
• Plant and Equipment: Loss or damage coverage for equipment owned or hired.
• Personal Accident: Financial support if you are injured while managing the project.
• Legal Expenses: Coverage for any contractual disputes.

What Is the Cost of Site Insurance?

The cost of site insurance depends on factors such as the property’s location, the length of the project, and the scope of the work. The property’s value also affects the premium.

What Type of Insurance Should Your Builder Have?

Before hiring a builder, it’s crucial to verify their insurance coverage. Reputable builders should have:

• Public Liability Insurance: Covers legal and compensation costs if their work causes damage or injury.
• Employer’s Liability Insurance: A legal requirement for any builders with employees.
• Contract Works Insurance: Protects ongoing work from damages due to unforeseen events like fire or flood.

Some builders may have a "contractors all risks" policy, which usually includes all three types of coverage.

Does Your Builder's Site Insurance Cover Everything?

If your contractor has valid "contractors all risks" insurance, meeting the rebuilding cost, you should be covered. However, if the contractor only builds the shell, and you take over from there, you may not have coverage once their work is complete.

Do You Need to Inform Your Insurer If You’re Living In While Renovating?

For simple decorating or minor updates, you likely won’t need to notify your insurer. However, for larger renovations or extensions that increase your property’s risk, informing your insurer is essential. Failing to do so could result in policy cancellation or claims being denied.

What Is the Cost of Extending Your Insurance?

You can expect a small additional premium on your existing buildings and contents policy when you extend your coverage. The amount will vary based on the level of work completed and the increase in rebuild costs.

Do You Need Specialist Insurance If You're Not Using a Main Contractor?

If you’re not hiring a main contractor with "contractors all risks" insurance, you’ll need to arrange your coverage. Look for an all-risks policy that includes:

• Contract works (including ongoing building, materials, and temporary structures)
• Employers’ liability insurance
• Public liability insurance
• Personal accident cover
• Legal expenses cover

What Is the Cost of Specialist Insurance?

The premium will depend on factors like your postcode, the contractor undertaking the work, and the nature and valuation of the project.

Do You Need JCT 6.5.1 Non-Negligent Cover for Your Renovation Project?

JCT Clause 6.5.1 insurance protects against damage to neighbouring properties caused by your contractor’s work. This is essential in cases where the damage, such as subsidence, isn’t immediately obvious.

What Is the Cost of Party Wall Insurance?

The premium for party wall insurance is typically a one-off payment based on the risk level, the nature of the work, and the contract value.

Do You Need Public Liability Insurance?

Public liability insurance is crucial for protecting against injuries to contractors or damage to property during renovation. It covers legal fees and compensation, ensuring that your project proceeds smoothly without financial strain.

What Is Property Owners' Liability Insurance?

This insurance protects homeowners against claims from third parties who visit the property, ensuring safety during renovations.

Do You Need Specialist Insurance for a Conversion Project?

If you're converting a building, you must arrange empty buildings insurance immediately after exchanging contracts. Specialist insurance covering both the existing structure and new works, combined with contractor’s all-risk insurance, is essential.

What Does Specialist Conversion Insurance Cost?

The premium is calculated based on the rebuild value of the structure and the project’s risk level.

How Do Restrictive Covenants Affect Insurance?

Restrictive covenants are conditions imposed by previous owners that dictate what can and cannot be done with a property. Always check your title deeds for any covenants, as breaching them can lead to legal consequences. Indemnity insurance can protect against claims from beneficiaries of the covenant.

What Does Indemnity Insurance Cost?

The cost will depend on the enforceability of the covenant and the potential risks involved.

Do You Need a Structural Warranty?

Structural warranties are essential for self-build properties, providing protection against defects and ensuring compliance with building regulations. Arrange your warranty early in the project to avoid escalating premiums.

Will Buyers Want a Guarantee for a Renovated Home?

Buyers will expect documentation for any renovation work, and a transferable warranty can reassure them of quality and compliance.

What Is the Cost of an Insurance-Backed Warranty?

The premium will depend on the contractor’s rating and the value of the contract.

How to Choose Renovation Insurance?

Compare different policies to find one that meets your specific needs, and always check for exclusions and limitations.