Insurance and Renovating

In all the excitement of a home renovation, it can be easy to forget to think about your insurance policy. Your insurance policy covers your home only as it was when you set it up. This means that your renovated home may not be covered or there may be different clauses specific to renovating within your policy. Going forward with renovations that lift the value of your home can leave you under insured if you leave your old cover as is. This means that if you needed to claim the replacement on the new parts of the house, you will receive replacement or a cash settlement matched to your property as it was when you set up the insurance (this will be less than it is after the renovations most of the time). In this case, you would be left paying the gap between your insurance payout and the costs of replacing or repairing your home. Insurance policies can be confusing and complicated so you must know the details of yours. For example, some policies may continue to cover you for your normal home and contents if you choose to live on your property throughout the duration of the works, but cease to cover you if you vacate. In that case, this would be incredibly important to know because you may need to take out extra insurance if you do choose to vacate. If you’ll be undertaking any part of the renovation yourself or coordinating it as a project manager, there will be extra insurances which you will need also. Understanding and being prepared for this is extremely important. The best thing to do is be on the safe side and check your policy documents thoroughly and make sure you understand what your policy covers during and after renovations. If you don’t feel like you completely understand or find you are not covered for renovations, you should call your provider directly to discuss the intricacies of what you have and what you need.  During this phone call, take extensive notes then repeat them back to ensure you have not misunderstood anything. Make sure you completely understand what needs to and would happen in every possible circumstance. Once you have a good understanding, request they send all this information to you in writing for your own records. This will mean you will both have proof of it if there are problems down the track and you can also refer back to it if you aren’t sure at any point. Understanding Insurance, an initiative of the Insurance Council of Australia offers vital information that you may find useful if you need to know more about this topic. They have a page all about making sure your insurance covers you fully here. It is extremely important that your home is covered by your insurance policy completely at all times and the above advice will help you ensure this is true. Don’t let it get buried by all the other things you have to do during a renovation! It is just as important as anything else even though a lot of the time you don’t notice your insurance policy. Don’t take the risk to be uninsured if something does happen.