Whether your home-insurance covers home-improvements is largely dependent on the terms of your policy and the type of work you are planning to carry out. Let’s take a more detailed look, so you can be ready when you decide to undertake a home renovation project.
Why could home improvements affect your home insurance?
When you make major changes to your home, like building an extension, converting an attic, or altering the property’s layout, you raise the risk you pose to your insurance company. For example, if walls, doors, or windows are removed, your home could be less secure. Renovation work could also mean you have an increased risk of damaging your possessions or having an injury. However, for simple things that do not affect the exterior building and the above risks, like installing a new kitchen, you typically do not need to inform your insurer. It could be worth checking anyway, though.
What Your Insurance Company Will Need to Know
Before you undertake significant renovation work to your home, you’ll need to answer some questions from your insurance company so that they can work out if there is an extra level of risk involved, and to what extent. You’ll typically need to tell your insurer how long the work will take, what it will cost, the name of the contractors you are using, whether the contractors have liability insurance, and whether your home will be occupied or not when the renovation work is being carried out. Your insurer may also need to inspect your property. If you’re taking out a home insurance policy for the first time, an inspection usually needs to be done. However, each insurer has a unique set of requirements, so it’s possible to get no inspection home insurance if there is no significant risk of things like catastrophic weather and there’s proof of fire prevention precautions.
Home Improvements Could Affect Your Rebuild Cost
One factor that insurance companies consider when assessing your policy rate is how much your property would cost to rebuild if it was completely destroyed. That is known as the rebuild cost. Typically, the rebuild cost is lower than the market price of your home. When you make home improvements, it could affect the rebuild cost of your property.
Occupancy Can Affect Your Home Insurance Policy
You may think you can disappear for several months while the renovation work of your property is being carried out, but if your home is left unoccupied for more than thirty or sixty days, certain things will usually become excluded from your home insurance policy. Typically, you will not be covered for water damage, malicious damage, or theft. However, if certain provisions are taken and you regularly visit the property, your insurer may still insure you for such things. But you need to find out before you leave your home unattended. Alternatively, it may be easier to stay put while the work is being done.
What happens after you inform your insurer about the home improvements?
After your insurance company has all the necessary information about the improvements you have planned, it will decide how to proceed. There are three potential outcomes:
- You will have to pay an additional premium to cover the home improvements.
- There will be no changes and your policy will continue as usual.
- Your insurance policy will not cover you for the home improvements.
Should you find yourself experiencing the latter, you still have options. The best idea is to take out specialist renovation insurance, which covers you for things like personal injuries, theft, damage to the building, and your home being unoccupied for more than 60 days.