What does renovation insurance cover?

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

What is Renovation Property Insurance?

There is no universal definition of this.

Renovation insurance provides coverage for properties undergoing extensive repairs or improvements that render them uninhabitable for prolonged periods. There is no universal definition, but typical renovation projects that require this special insurance include:

From the point of view of renovation insurance, it would be sensible to discuss the principles with an experienced provider of such cover.

  • Major structural changes like room additions or layout modifications
  • Substantial upgrades like new bathrooms or kitchens
  • Work that requires moving out of the home for weeks or months

Why is Special Coverage Needed?

Standard home insurance policies only cover unoccupied properties for 30-45 days typically. After that, you may lose protections. Renovation policies bridge this gap to provide continuous coverage. They guard against risks like:

Without renovation insurance, major rebuilding projects can become financial disasters if the empty home is damaged.

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 that are undergoing substantial work, which may render them empty and uninhabitable for longer periods of time.

What’s Usually Covered and Excluded?

The specifics vary by policy, but renovation insurance usually covers the structure but not the renovation work itself. So if a storm collapses your roof mid-project, repairs would be covered. But issues with the contractor’s work or delays are not.

  • 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 any renovation property insurance would automatically cover them. To fully cover potential losses by contractors, separate builders’ risk insurance is usually recommended.

Added Protection for Major Renovations

Ultimately, renovation insurance safeguards your most valuable asset – your home – while it is in a partially demolished and vulnerable state. Without this coverage, a fire, storm, or other disaster mid-project could completely derail a major home renovation, leaving you with an uninhabitable, damaged shell of a home and no funds to rebuild.

For example, imagine you’ve ripped off old roofing shingles and partially installed new ones when a heavy storm hits. The exposed roof decking leaks profusely, causing water damage inside and collapsing ceilings. Your standard home insurance won’t cover the uninhabited house. However, with renovation insurance, you have the necessary resources to not only rebuild the roof but also address the water-soaked interiors. Whether you hire contractors through an online search for “roofing companies near me” or rely on recommendations from friends to fix this roofing emergency, having renovation insurance ensures access to funds for these critical tasks.

This type of insurance provides essential financial and logistical support for homes undergoing renovations. By covering unexpected disasters that disrupt progress mid-project, renovation insurance offers valuable peace of mind while your home is in a state of disarray. This added protection makes it safer to undertake major renovations aimed at enhancing your living space.

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.

If you want to further read about how a renovation insurance can be beneficial, you can check out this website: Guide to renovating.