Why standard home insurance won't cover your renovation
Many people may not realise it but a standard home insurance policy is unlikely to cover you while you are taking on a renovation project. One reason for this is that standard home insurance is generally based on the homeowner residing at the property in question. If your project requires the property to be vacated, which may well be the case for larger scale conversions and renovations, then it is likely that the policy would become invalid.
Most standard home insurance policies have an unoccupancy clause on them which restricts the cover if the property is empty for more than 30 days. If you choose to move out of the property for the duration of the works this clause is often implemented. Additionally, regardless of whether the property remains occupied or not, the very nature of the work being carried out may mean that your standard home policy is unable to cover you.
Different insurers vary when it comes to the rules surrounding renovations but, although some insurers may be prepared to continue to provide cover for the duration of the works on the existing building, any claims arising as a result of the building works would likely be excluded. The value of the new works, including fixtures, fittings, and materials, is also unlikely to be covered. Furthermore, most home insurance policies will not cover you if the cost of the work being carried out exceeds £30,000.
The risk is not always just to the insured property. Building work can also result in damage being caused to neighbouring properties and this should also be a consideration when discussing the nature of the works and the proximity to the adjoining properties, particularly where there is piling or basement works being undertaken or there are party wall agreements in place. Damage could be cracks appearing the neighbouring walls or in the most severe cases, the adjoining property could collapse.
Why you shouldn't rely on the contractor's insurance
A contractor may have public liability insurance but this would only cover claims in the event of their negligence. If the contractor has ‘All Risks’ cover, including materials on site, this would not extend to cover materials purchased independently of the contractor. Often people have purchased their kitchens, bathrooms and other fixtures separately from the builder, leaving these items uninsured. They might also be more than one contractor on site (builders, plumbers, electricians) and it may be unclear who is responsible for what in the event of a problem.