In Australia, we have a passion for home renovations, whether it’s a new decking area, a bathroom makeover, or a full home transformation. However, before starting any renovation project, it’s crucial to inform your insurer about the planned work to understand how your policy will respond in the event of a claim.
Understanding Your Home Insurance Policy
All home insurance policies have limitations on the value of renovations they will cover before the policy becomes void. It’s essential to verify these details with your insurance broker in Werribee or Geelong BEFORE you begin the renovations. Exceeding these limit’s can leave you uninsured for both the renovation work and potentially for damage to your existing home, exposing you to significant financial risk. Additionally, you need to be aware that home policies commonly have other restrictions in cover eg exclusions for damage caused by water entering the home through an opening made for renovation, Cracking, collapse or subsidence caused fully or partially by renovations, extensions or alterations.
Home Warranty Insurance
Each state in Australia has statutory requirements for Home Warranty Insurance, which protects consumers if the building contract is not completed or the builder fails to correct discovered defects or if the builder dies, disappears, or becomes insolvent. The builder you engage should have this insurance policy and will usually issue a Warranty certificate in your name. These certificates may be required by council or at the time of selling your home. In Victoria Warranty Insurance must be obtained for any work that is done that exceeds $16,000
Contract Works or Construction Policy
Not to be confused with Home Warranty insurance, a Contract Works or Construction policy is designed to cover the building works to be undertaken. It covers physical damage that may occur during the course of the works e.g. fire, theft, malicious damage, wind, storm, earthquake. Whilst your builder should have this insurance, it often covers only the builder’s works undertaken , not the repair of your existing structure or any other structure at the site if it’s damaged. Generally, it is the responsibility of the property owner to insure their own property unless the Building Contract states otherwise. It is very important that the builder and property owner sort out who is responsible for insuring which part of the buildings PRIOR to works commencing. There is the potential for there to be a gap in coverage and it is important that the policy is tailored to meet your specific needs.
Post-Renovation Insurance Adjustments
Upon completion of your renovations, you will no doubt need to increase the sum insured on your home building insurance to reflect the enhanced replacement value of your property. Ensuring an accurate replacement value of your home in the event of a total rebuild is vital. If you’re unsure about the replacement value, a property surveyor can provide an accurate assessment.
Simplifying the Insurance Process
Navigating the insurance landscape for home renovations can be complex, but it doesn’t have to be. By working with our team of knowledgeable insurance brokers in Werribee or Geelong, you can simplify the process and ensure comprehensive coverage. If you’re planning a renovation, give us a call. We are always here to assist you when needed.
By staying informed and working with experienced professionals, you can enjoy your home renovation projects with peace of mind, knowing you are adequately protected.