What does renovation insurance cover?

Here are a selection of FAQs and responses on the subject of renovation insurance.

What is a renovation property?

There is no universal definition of this.

For example, some people might describe the fitting of two new windows into a property as “renovation”. For others, the cost, scale and duration of such work wouldn’t justify the use of the term.

From the point of view of renovation insurance, it would be sensible to discuss the principles with an experienced provider of such cover. Typically though, from an insurance viewpoint, renovation might be seen as being a combination of:

  • substantial work on a property that may increase its utility and perhaps value;
  • extensive work that might mean that the property will be unoccupied for a significant period of time.

Why might that mean special insurance cover?

A typical standard owner-occupier or landlord property policy will cover a building that’s unoccupied but only up to a specified number of consecutive days. That’s usually around 30-45 days.

If your property goes past that and remains unoccupied, your standard policy cover may be at risk.

In such situations, you may typically have one of two options if you’d like to ensure continuity of full cover:

  • unoccupied property insurance – typically applicable to habitable properties with shorter projected durations under “unoccupied” status;
  • renovation insurance – typically produced for properties than are undergoing substantial work, which may render them empty and uninhabitable for longer periods of time.

What risks may my empty and under-refurbishment property face?

Although it might be tempting to assume such properties are not at risk, in reality, they are from things such as:

  • storms and floods;
  • fire;
  • third party public liability claims (e.g. members of the public passing by who are injured by falling materials);
  • squatters and vandals;

Do note that because some of the above has been listed, it does not mean they would all automatically be covered by any renovation property insurance. You must read your policy carefully to be sure just what protection you’re getting for your money.

Would cover for the building work and subsidence be included?

It really would be necessarily to look at a specific policy to answer for certain but typically “no” and “possibly” in that order.

Different insurance is typically required if, for example, you wish to cover yourself for the financial consequences of the work over-running or problems arising as a result of the quality of your builder’s work.

Subsidence cover may be included as standard by some but not all policy providers.  It’s worth pointing out that typically such cover won’t apply in cases where the subsidence has arisen as a result of the work being undertaken.

Could I protect any government renovation grants with this type of policy?

There may be various local authority and national grants available and this presumably relates to situations where a grant has been withdrawn or is no longer available due to any of a variety of reasons, once work has started and commitments have been made.

Typically – “no”. The relationship between you and any government grant is beyond the scope of an insurance policy of this type.

Surely my builder’s insurance will cover me?

That would be highly unlikely – at least in terms of some of the above-mentioned risks.

Your builder’s insurance is most likely in place to protect him or her against any claims you might make against them for, say, damage to your property caused by their work.  It is not renovation insurance designed with your overall protection in mind.

For example, if your property was damaged overnight by a storm, it’s likely that your builder’s insurance would offer you no protection at all.

Further reading: Guide to renovating.