Home renovations – the trials and tribulations

07 Nov 2014

By Darren Reilly

Considering renovations on your house? Know what you are and aren't covered for? Let's face it, if you're like most people you're probably guilty of not reading the fine print in your insurance policies.

It can come as a shock to discover that your house and contents insurance actually excludes cover whilst your renovating - if the value of work exceeds a certain limit. This amount can be as low as $5,000 to $50,000. It's a clause that also applies if you're renovations involve opening your house to the weather, for example by knocking out a wall, lifting the house, replacing part of the roof or simply adding a window! It really is quite scary to think you're not covered if you don't advise your insurer of the work about to be undertaken.

I recently had a client who got caught out by this very situation. While renovations were underway a storm caused substantial damage to his property. The builder in this case had allowed his insurance cover to lapse and the owner was faced with the prospect of not only paying for the planned renovations but also having to pay to fix the water damage to his property.

You and your builder

So shouldn't your builder have the appropriate insurance cover in place? Well the simple answer is yes, but unfortunately the reality is that most don't! It's an important point to double check before the first swing of the hammer takes place. Questions you need to be asking your builder include:

  1. Can you show me your certificate of insurance for public liability?
  2. Does your policy limit per contract exceed the cost of the renovations being undertaken?
  3. Does the policy cover your home for an amount that equals the building value of your own insurance.

If you don't check these points and you get caught out some of the items you'll find are not covered are:

  • damage caused by water entering the opening made by the builder
  • roof open and tarped
  • water entering during a storm
  • no cover for water extraction, replacing damaged wall linings, floor coverings, furniture
  • fire during electrical wiring and your house is destroyed or partly gutted
  • any damage caused by the emergency services trying to save your property.

Now no one wants to have an argument with their builder as to who is paying for these repair costs, especially after the fact. It's much simpler to have a conversation beforehand and to take five minutes to have a chat with your own insurance provider to confirm what you are and aren't covered for prior to any work taking place.

So my advice is don't get caught out and find you're left having to foot the bill for potentially hundreds of thousands of dollars worth of damage that you weren't expecting. Do your checks up front, speak to your builder, check your own cover and then comfortably sit back and let the renovations begin.

To learn more about Darren, view his online profile.​

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