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Renovating your home? Call your insurer!

Published on: 25 June 2015

Planning a home renovation or alteration can be a lot of fun – and a lot of work. Before you knock a hole in the wall, start picking fixtures, choosing colour schemes or gutting your kitchen to create the home of your dreams – consider how these renovations will affect your insurance needs, both during and after renovations.

  • Increasing the value of your home

    A renovation may affect the value of your home, which in turn can change your policy. This is because the value of your house can increase in relation to the type and extent of the renovations that you make.

    This means that if the value of your home increases due to the upgrade, and you fail to inform your insurer, it could leave you underinsured and vulnerable to losses.
  • Security upgrades

    Premiums are calculated based on the level of risk (amongst other things), and there are steps you may be able to take to reduce those risks. For example, installing an alarm in your home can aid in the prevention and mitigation of a break-in - this may help to reduce the premium on your home insurance!

    It is therefore important that you inform your insurance company as soon as possible of any security upgrades to your home.
  • Buildings under construction

    Another reason to inform your insurer of your home renovations is that although your home insurance policy won’t change during the renovation process - certain exclusions may come into play. For example, if your roof is part of the renovated area and the interior of your house is only partially covered, there will not be any cover for natural perils such as storms or hail, which may damage your new lounge suite.
  • The contractor

    If you hire a contractor, ask him whether he has adequate insurance coverage for his workers before the work begins. He should provide proof of insurance in the form of a ‘certificate of coverage’ in case his workers get hurt on the job. If a worker is injured in your home and the contractor does not carry workers’ compensation, you could be sued and your insurance may not cover this cost.

    Using a reputable building contractor may also save you from extra insurance costs due to incomplete or faulty workmanship. This is because most insurance does not cover building or structure collapses or deterioration. Therefore, it is best to hire a contractor who has experience with similar projects to the one that needs to be completed.
  • The building plans

    Finally, it is vital that your building plans are approved by all relevant parties.  Your insurance company could reject your claim if your building does not conform to the required building standards and laws.
  • The insurance policy

    Once your upgrades are complete, contact your insurance adviser as soon as possible. Talk about the changes and discuss whether your home insurance cover needs to be altered, so that you can rest assured knowing that you are not underinsured.

Have you recently renovated? Remember that you can adjust the value for which you are covered by logging into MiXpress and managing your policy online.