Whether it is your own home or a buy to let property, any renovation project is a serious matter, not least because of the expense and disruption.
How often have you heard the complaint that it cost twice as much as you bargained for by the time the building works are complete – a report some time ago in the Daily Mail’s money pages revealed that 45% of property owners spent more than they had budgeted for when renovating a property.
If it is let property you are looking to renovate, it is not just the cost of the building works themselves, but also the rental income that is lots whilst tenants cannot be living there.
An important element of the costs of renovating any property – your home or one that is let – is renovation insurance. Let’s see why that is so.
Renovation projects are not only typically expensive, they may also place an empty property undergoing works in new and serious risks and perils – not only is there a risk of something going wrong with any new building works, but these might even cause structural problems for the existing building.
The risks are sufficient to raise concerns on the part of your existing home insurance or landlord insurance provider.
Naturally, there are all kinds of renovation project. Some property owners might even talk about renovating the place when all that they mean is a quick lick of paint. That is the kind of cosmetic work quite unlikely to give your insurer any problems of course.
But anything more serious – such as building an extension, installing a loft conversion or making any kind of structural alteration – is almost certain to raise alarm bells with your current insurer, who may refuse to cover the risk of damage to the existing property, decline cover for the new works, charge an additional premium, or terminate cover altogether.
In the absence of the protection which normally safeguards your property, therefore, the solution is presented by a standalone form of insurance, which lasts for the duration of the works and protects both the existing structure and the new building, called renovation insurance.
A detailed guide to renovating and renovation insurance may be found in the library of different property guides we have published here at Cover4LetProperty.
If your proposed renovation works invalidate any existing home building and contents insurance or buy to let insurance policy, therefore, what does renovation insurance cover?
Although different policies may vary quite widely in the details, the following are some of the important elements typically covered:
- you need to restore the protection of the existing building against the usual major risks, which are likely to be that much greater whilst the works are in progress – whether because of the added risk of flood damage, for example, if the existing building is no longer wind and water tight or because of any structural damage caused during the work in progress;
- in addition to the existing structure, renovation insurance also provides protection against loss, damage or the need for reinstatement of the new works;
- the contents of your existing home or let property are also under greater threat during any renovation works – especially since the premises are likely to be unoccupied and for there to be no one on site for significant periods of time, especially at night;
- renovation insurance may restore the protection you need for the property’s contents;
Materials and supplies
- any materials and supplies that need to be stored on the site are at risk of theft or damage, so your renovation insurance needs to cover such potential losses;
Public liability insurance
- building works on your property may pose a risk of injury or property damage to passersby, visitors to the site, neighbours and other members of the public;
- if one of these third parties suffers a loss or injury, you may be sued as the property owner – and claims may be substantial;
- public liability insurance provides indemnity against such claims – typically for at least £1 million;
In short, if you are planning any renovation project for your home or let property, you might want to give careful thought to the need for renovation insurance.