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The need for Renovation Insurance and what it needs to cover can vary greatly, depending on whether you are a homeowner, a builder or a property developer.
For Homeowners
You may not even think about renovation insurance unless you have a friendly insurance broker (like those at Prizm Solutions) in your corner to mention it - but when you read the small print of standard home or property insurance policies, many will exclude construction-related risks.
And not only that, but it is often in the small print that you must tell your household insurers when you’re having major work undertaken at your property and the definition of major could be as little as £25,000.
Renovation insurance is typically required when the renovation work is extensive, involves structural changes or significantly alters the value of the property. Examples include removing load-bearing walls, extending a property, converting a loft or basement or installing new electrical or plumbing systems. These types of projects may increase the risk of fire, water damage and structural failure, yet these kinds of risks aren’t usually covered by standard home policies. Renovation insurance fills these gaps in cover, whilst usually also covering the existing building, new extensions and materials on site.
Another key trigger for renovation insurance is when a property is unoccupied for an extended period whilst work is being undertaken. Many insurers limit or void coverage if a home is left empty for more than 30 or 60 days. Renovation insurance can fill that insurance gap, ensuring the building is protected even whilst it’s vacant.
If contractors are hired, renovation insurance can also cover liability for third-party injuries and damage, safeguarding both the property owner and construction team. Some mortgage lenders and local authorities may also mandate this type of insurance before approving finance or issuing permits.
For Builders and Contractors
Builders and contractors usually need their own professional policies, including contractor’s all-risk insurance, employer’s liability and public liability to cover their operations. However, if they’re overseeing the entire project, it’s essential to clarify who is responsible for insuring what elements. Some renovation policies end up with joint contracts between the homeowner and builder to avoid coverage gaps.
For Property Developers
For property developers, especially those renovating multiple units or flipping properties, renovation insurance needs to be more comprehensive. It often includes cover for unoccupied properties, higher-value works, commercial liability and protection for multiple stakeholders like investors and lenders. Lenders may even require evidence of insurance cover before releasing funds.
Always consider renovation insurance
Regardless of whether you’re a homeowner, builder, contractor or property developer, always consider renovation insurance when the risk profile of the property changes due to building activity.
It’s especially important to always inform your current insurer before starting work, and can be useful to seek advice from a broker experienced in construction insurance, like Prizm Solutions, to ensure you’re adequately covered.
Whether you’re enhancing your home, managing a renovation for a client or developing property for resale, the right insurance not only protects your investment, but also helps with your peace of mind.
As well as renovation insurance, Prizm Solutions can also help with other property and business insurances, such as Professional Indemnity Insurance and Builders Insurance. Just contact us for a no obligation chat about your insurance needs.
