Do I need different insurance if renovating or extending my home? Why do I need additional insurance? These are just a couple of the questions we are often asked when arranging client’s insurance.
The reason insurers look at renovation insurance differently is due to the nature of the work; major changes to your property increase the risk in insuring it. Structural changes and extensions often involve the temporary weakening of the building, there will be periods when the property will be unoccupied whilst contractors complete the works, as well as careless contractors who’ve often been found to be the cause of serious floods and fires; insurers have good reason to be cautious!
A major area of confusion relates to the insurance that contractors hold, or rather don’t. Contractors often represent themselves as being ‘fully insured’, however most of the time this relates to liability insurance, not the insurance of the works they are undertaking, or the property they are working on.
Many insurers seek to restrict the cover they offer on unoccupied properties undergoing works. ‘Contractor’s All Risks insurance’ provides cover for just that, all risks. This may not matter too much at the start of a contract, but is a serious failing if not in place, towards the end when the likelihood of burst pipes and water damage claims are at their highest. In an ideal world you should have your property and the works insured on an ‘all-risks’ basis to avoid problems. Additionally, if your insurance is split between you and your contractor there will always be two insurers dealing with a claim which inevitably leads to squabbling over who’ll pay for what.
Joint Contracts Tribunal (JCT) contracts set out and make insurance obligations during the works very clear, but can cause very specific problems for standard home insurers. Perkins Slade is not a standard home insurer; by working with us and selecting the correct renovation insurance you will be covered for:
- Your existing home up to the cost of rebuilding it
- The value of the works being undertaken
- The materials on site prior to fitting (important for kitchens, bathrooms and expensive materials)
- Your Public Liability exposure
- Liability to your neighbours under The Party Wall Act.
The Party Wall etc. Act 1996
The Party Wall Act is an enabling act that provides a framework for preventing and resolving disputes in relation to party walls, boundary walls and excavations near neighbouring buildings. Read the Department for Communities and Local Government Party Wall advice booklet for more information.
Party Wall insurance (or non-negligent liability insurance) as it is technically known, is there to pick up your liability to your neighbours both during the works and for the defects liability period (usually 12 months after completion). This insurance operates if liability for specific damage, noted under the policy, cannot be levied at the contractor or professionals involved in the works. This cover mostly relates to serious structural damage, rather than smaller claims for minor problems or redecorating.
How can we help?
Perkins Slade is a mid and high net worth insurance broker, with experience of providing expert advice and the provision of bespoke insurance policies for its clients. It is extremely important that you ensure your property is protected, after all, for most it is our single biggest investment.
Our key message is to follow the advice we provide when undertaking major changes to your property, and to not assume that your insurer will be content to provide the same cover they were before the works began. For more information or assistance on any of the topics in our blog please call your usual Perkins Slade representative or contact:
Jill Kerrigan, Relationship and Development Manager
T: 0121 698 8073
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