Insuring for home improvements

If you’re planning to extend your home this year or undertake any other major renovation projects, there’s likely to be a lot to think about, from finding the right contractor to potentially applying for planning permission.

But there is one important factor often overlooked by homeowners, namely insurance – while the work is being carried out as well as once the project is completed.

There are two types of home insurance: buildings and contents cover. Buildings policies apply to the structure of the home and help protect homeowners against issues such as subsidence or flooding, while contents cover applies to the possessions within a home and will typically be used in the event of a burglary or accidental damage.

When to get in touch

So how can a home improvement project affect these policies and when should you get in touch with your insurer?

Essentially, insurance companies want to know when customers are carrying out work that could increase the risk of claims being made. So, for example, if you are extending your home, there may be concerns about the level of security on your property, and having builders in your home can increase the risk of accidental damage.

On the other hand, if you’re just making cosmetic changes, such as having rooms decorated, there should be no need to inform your insurer. If in doubt, however, it’s worth contacting your insurer’s customer services department to check their view on the work you’re having done. You don’t want to run the risk of possibly having a valuable claim turned down because you failed to check the small print on your policy.

Your insurer may not need to make any changes to your policy, but it could charge an extra premium while the work is carried out – especially if you want to extend cover to any accidental damage that may result.

Your builder’s own insurance

Most insurers will want to check that the contractors you employ have their own cover. Make sure they have public liability insurance, which should pay out if they are responsible for any damage to your or a neighbour’s property, or if someone is injured as a result of the work they are doing. You could also ask if they have a policy known as all-risk cover, which applies to new structures that are not yet covered by the customer’s own buildings insurance policy – typically because they have only just been built.

Leaving your home unoccupied

For major projects, it may be necessary for you and your family to temporarily move out – and this can have implications for your insurance. Most home policies, whether for buildings or contents, stipulate that homes should not be left empty by residents for periods in excess of, typically, 30 days. This is largely because empty homes can be more of a target for burglars, and also because it may mean no one being available to maintain the property – for example, to deal with possible frozen pipes or blocked guttering.

If you do need to move out for more than a month, you will certainly need to inform your insurer. They may be able to let you maintain your cover for an extra charge, or you may have to take out a new specialist policy (see below).

Legal protection

It’s also worth taking this opportunity to check what legal protection you have through your home insurance policies: many providers include something called legal expenses insurance automatically in their cover, while others may require you to pay an additional charge for this.

Legal expenses cover can help with the cost of taking legal action against a tradesperson who fails to fulfil their side of the contract or whose work is substandard.

Specialist insurance policies

In some cases, your insurer may refuse to cover you while the building project is being carried out, perhaps because it thinks the risks are too high. If this happens, you could contact a specialist insurer that offers dedicated renovation insurance – of course, the premiums for this kind of cover are likely to be considerably higher.

Cover once the work has been completed

Just as important is updating your buildings and contents policies once a project has finished. In many cases, building work will increase the value of your home – which means that your insurance policy may need to be updated to reflect this.

If you have added rooms to your home, you are also likely to have bought new furniture or appliances: check that your contents policy is sufficient to cover their extra value, and in particular any high-value items you’ve bought, such as TVs or computer equipment.

Finally, bear in mind that home improvements don’t necessarily mean higher costs: if you’ve installed new doors or windows with the latest security features, for example, your insurer may well reduce your premiums as a result.