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How do renovations affect building insurance?

Its all Insurance

Posted on Tuesday, April 10, 2018

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Whether you are planning on remodelling your home completely or simply extending the garage, it’s important to inform your insurance company about your plans to ensure your home insurance policy remains in effect throughout this period. In addition, should anything happen on your property in future, you may find that your current policy doesn’t cover what you thought it would.

Here are five reasons why you should keep your insurer up to date on your home remodelling plans, and how to avoid any nasty surprises.

1. Renovations can increase the value of your home

The purpose of your building insurance is to cover the cost of replacing your home in the event of any significant damage. Anything that affects this replacement cost will also affect the cost of your monthly premiums and the amount your home is insured for. It might be helpful to note that when informing your insurance company of upgrades, they may require receipts, so keep proof where relevant.

2. You will have workers on your property who need protection

Should a worker, who is part of the renovation team, be injured on your property during the renovation process, you might be liable for costs and damages. If that’s the case, forewarned is forearmed. Before hiring a contractor, check to see if they have insurance for their workers. Using a reputable building contractor could save you from extra insurance costs due to bad workmanship.

3. Building improvements = contents improvements

Upgrading and improving the structure of your home goes hand-in-hand with new furniture, new fixtures and fittings and everything else this includes. This means your building insurance as well as your home contents will need to be relooked. Note that if these new additions are valuable, you can speak to your insurer about getting a better deal by including security upgrades into your renovations.

4. Vacating your home might invalidate your policy

Most policies state that the home must remain occupied for insurance to remain valid. This is because an occupied home is less likely to be burgled or vandalised. If you have to leave for an extended period while your home is being renovated, your insurer needs to know this so they can adjust your cover accordingly.

5. Get all plans pre-approved

It’s possible that an insurance company could deny a claim based on the fact that your building does not conform to the required building standards. This is particularly important for properties close to rivers, beaches and dams as the 50- or 100-year flood line could affect the approval of plans. You also want to avoid any legal battles with neighbours who take offence to your improvements.

Having kept your insurance company up to date on your plans throughout your renovations, it’s important to then contact them once the renovations are complete and talk about the changes and whether your insurance needs to be altered to make allowance for them.