Is our house insurance valid while we do an extension?
We have to move while we are expanding our house: is it still covered by the home insurance and how do I prevent something going wrong?
We are in the process of an extension and total renovation of our house, where we will strip it and do construction and roofing work.
We will have to move for six months while this is happening. What should we do with our home insurance?
I understand that we have to tell the insurer, but will the home insurance still cover us during this period and will we probably have to pay a high extra premium?
How do you insure your home during a major renovation? Or should we just rely on the builder’s liability insurance?
Over our heads: The ins and outs of home refurbishment insurance has one reader wondering what their options are
Sam Barker at This is Money replies: Our reader takes the plunge and wants major upgrade work done on their long-term home – but this pushes them into a world of non-standard insurance.
What’s the best way to get the peace of mind that their most prized possession will remain safe and insured?
There are a few points to address here. Does the homeowner’s current home insurance policy cover them for the planned work, can it be extended for this, or do they need a completely new cover?
Can they also count on the builder’s insurance or not?
While our reader’s question focuses on home insurance, there is also an issue with home contents insurance as there will be assets in the property.
This is Money spoke to a specialist to find out what our reader needs to do to stay safe from major construction work.
Andrew Gibbons, managing director of insurance brokerage firm Mason Owen, said: “In terms of expansion and total renovation, the first red flag would be if this is standard home contents insurance. Chances are a member of the public has been online and purchased basic home contents insurance. If not, their insurance broker can advise them on this.
‘It is very unlikely that insurers with standard products want to get involved in a renovation of this size, especially if the house has been empty for a while. So when this person makes a disclosure, he shouldn’t be surprised if his insurer says he won’t be covered during the renovations.
“If an insurer says yes, they can limit coverage and probably charge an additional premium. The property is left empty, it can be open to the elements and there is a greater risk of fire if people are working on it.
“As projects get bigger, people use something called a “standard form of construction contract.” That determines who should insure what – the homeowner or the builder or architect and things go from there. But at the bottom end, projects usually don’t have that.
Sam Barker from This is Money adds: The homeowner would do well to contact their existing insurer or broker and ask if their existing home insurance policy can be modified to cover it while work is in progress.
If not, they must take out specialist insurance, the so-called ‘building insurance’ or sometimes ‘extension’ or ‘renovation’ insurance.
The homeowner should also inquire with his old insurer about canceling his home insurance for the period of the renovation and getting a refund due to the change of occupancy.
When it comes to builder’s liability insurance, Gibbons points out that it may not be as helpful as the customer imagines.
The builder has – or should – have employer liability and liability insurance.
But the former only covers the builder’s staff, while the latter also does not protect the homeowner’s house as the conclusion is that the public liability will cover the building. Maybe not!
“The subject of the construction work is the building and so may not be subject to public liability,” Gibbons said.
Public liability covers the builder’s liability in managing the contract site while it is under their control, rather than paying for damage to the property while work is being done on it. The client would also have to prove negligence, which can be difficult in a construction scenario. Normally, insuring the existing structure is the property owner’s responsibility.’
The homeowner should also make sure that their builder has “contractors all risks” insurance. That covers all subcontracted work and materials used for the renovation, whether attached to the existing structure which is insured separately or not.
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