What is renovation insurance?
Renovation insurance is a standalone insurance product which plugs the gaps inevitably left by your regular property insurance whilst renovation works are in progress – the building of an extension, loft conversion, refurbishment or remodelling of your home or buy to let property.
It restores the protection needed for the present structure and fabric of the property against damage caused by the building works themselves or for any of a number of other unexpected events – such as flooding, fire, vandalism, impacts, and theft.
Why is it necessary?
It is needed because your existing home or landlord insurance is unlikely to provide the cover the property continues to need during renovation works.
Unless these involve nothing more than a mere lick of paint, your existing insurance is likely to specifically exclude structural damage caused during such works and cover may lapse altogether. Renovation insurance is designed to plug that gap.
It also helps you comply with one of the conditions almost certain to be attached to any mortgage you have on the property and that is the requirement to maintain adequate building insurance at all times – an almost universal condition, which is noted in guidance offered by Citizens’ Advice.
If your regular property insurance becomes restricted or lapses because of the building works in progress, therefore, renovation insurance continues to ensure that you are complying with the mortgage conditions.
It is standalone cover, but designed to provide temporary protection during the renovation works. Once the latter are completed, you revert to your normal home or landlord insurance – reviewing the total building sum insured to reflect the increased value of your renovated property.
Because it is temporary cover, therefore, a distinctive feature of renovation insurance may be the ability to purchase it for periods of less than the full 12 months normally required for other forms of general insurance. If the works are scheduled to last just three or six months, renovation insurance may be tailored to cover just this period – yet also remains sufficiently flexible to be extended if unexpected delays or hold-ups occur.
Unoccupied property cover
One further important aspect of renovation insurance is its role in providing cover when your property is unoccupied for longer than a month or so – something that is almost certain to occur if extensive building works are being carried out and you need to vacate the home or temporarily vacate it of any tenants.
Even though there may be people working on the property throughout the day, there are significant periods of time when the property is empty – and these are times when it is likely to be at its most vulnerable.
When no one is living there, the need for minor repairs may go unnoticed and rapidly develop into major emergencies, whilst an empty building is especially vulnerable to squatters, vandals, arsonists and other intruders, cautions the British Institute of Facilities Management (BIFM).
As a result of the heightened risks, most home and landlord insurance policies severely restrict the scope of cover, or regard it as lapsed entirely, once the property has been empty for longer than 45 to 60 consecutive days (the exact period varying from one insurer to another). Once again, renovation insurance plugs this gap by incorporating a valuable element of unoccupied property insurance
Further reading: Guide to Renovating