What is a Renovation Insurance Policy?

Renovation Insurance is a specialised insurance designed to safeguard your property and financial investment during home renovation projects.

A standard building insurance policy may not cover damages or losses incurred during construction. In comparison, renovation insurance provides comprehensive protection against unforeseen circumstances throughout the building works.

Renovation Insurance programmes are an increasingly popular risk management technique used by property owners, developers and contractors. They can sometimes reduce total insurance costs but generally provide access to much wider cover than would otherwise be available.

You can find additional information on the importance of Renovation Insurance policies on the British Insurance Brokers Association website.

Can I insure my property on a standard building policy during the renovation?

You need to let you existing insurer know details of the works which will take place. Many standard building policies are unable to accommodate cover during building works or will significantly restrict cover whilst works are in progress. Cover restrictions include reducing the perils which are covered to the acronym FLEA (standing for Fire, Lightning, Explosion/Earthquake or Aircraft perils only). As a result, risks such as theft, malicious damage, escape of water (burst pipes), flood, subsidence are commonly all excluded. This is likely to be the case if the property is unoccupied throughout the works (contractors on site does not qualify as occupied).

Most insurers will allow a small amount of non-structural decorative type work. However, when more extensive work is needed, insurers will often limit cover to FLEA and specifically exclude damage caused by a contractor during renovation or refurbishment of a property. Unfortunately, this leaves the property owner with a dangerous gap in cover.

Doesn’t the contractor have insurance?

You should always check the insurances of your contractor (we can help if you need). The insurances required will vary depending on the project, but generally we would recommend your contractor has in place the following insurances:

• Contract Works Insurance – covering the value of the contract value in progress, for instance, an extension which is being built.
• Public Liability Insurance – in respect of their legal liability for injury to third parties or damage to third party property arising from their negligence.

That said, there may be incidents where the cause of the damage is unclear.

A good example is a contractor is carrying out electrical and heating installation at a property, and overnight a fire starts and causes extensive damage to the building. If the cause is undetermined:

• The standard building insurance policy arranged by the owner often has a “contractors exclusion” applied, excluding any damage arising out of the building works. The insurer will likely assume the damage was caused as a result of the contractors works and may therefore decline the claim.
• The public liability insurer for the contractor will require evidence of their policyholders negligence in order to accept liability. Often this can be difficult or impossible to prove.

Therefore, there can be a gap in cover, where neither policy deals with the claim.

Renovation Insurance prevents coverage gaps

Daines Kapp offer a solution which can comprehensive provide cover for the buildings undergoing extensive renovation and refurbishment. Different levels of cover are available starting at basic cover for FLEA perils only up to all risks including accidental damage and subsidence. Critically, there are no contractor exclusions, therefore so long as the peril is insured, the damage will be covered.

The policy can include the value of the contract works and public liability risks for the duration of the contract. Furthermore, cover may be extended to include contents, contractors own plant, hired in plant, site huts, tools, non-negligent liability, advanced loss of rent and terrorism.

Why choose Daines Kapp?

Daines Kapp have particular expertise in the renovation sector. We provide homeowners and landlords with specialist coverage for properties undergoing both minor and major renovations and refurbishments, including structural alterations.

Our renovation solutions are designed to bring peace of mind to property owners, ensuring their assets are suitably protected throughout the renovation process. Once works are complete, we can switch the cover back to a standard landlord or household insurance policy.