How home renovations can affect your insurance

How home renovations can affect your insurance

Private Property South Africa
Private Property Reporter

Home renovations can be a fun DIY project, or they can involve extensive makeover plans and huge budgets. Perhaps the lockdown has left you wondering how you can upgrade your living space to make it feel more like home. Whichever route you decide to take, it’s important to understand how renovating your home can affect the status of your home insurance.

Know the difference between building insurance and home contents insurance

The first fundamental thing to understand before renovating your home is understanding the difference between building insurance and home contents insurance. Building insurance insures the structure of the house, including walls, floors, and roofs whereas home contents insurance covers the property you own, such as furniture.

Knowing this difference is important because oftentimes, renovating your home means also adding new furniture or valuables that may have to be added to your insurance for coverage.

Read: What homeowners need to know about insurance

Pre-approve renovation plans before going through with them

Before setting out to upgrade your home, it’s recommended that you consult with your insurance provider to have an idea of whether you’ll need to change your coverage or not. Some home insurances may not cover renovations or your home upgrades which could result in you being underinsured, so it’s important to read the fine print and ask the necessary questions to avoid any unpleasant surprises.

It’s also important to bear in mind that you may need to cover the materials involved in the renovation process.

Additions to the home increase home value, meaning your insurance has to increase

As previously mentioned, your home insurance premiums will likely increase after your home renovations. After getting pre-approved for your renovation plans, the next step is to finalise the necessary documentation that will ensure that the structure of your home, including your valuables, are adequately insured.

Make sure you document every purchase you make for materials, furniture and even the labour you’ve hired to conduct the upgrades. You should also take pictures of your home before and after renovations. Keeping a detailed record in a safe place (as well as on a cloud storage as a back up) is beneficial for you, and can work in your favour with regards to getting coverage and claiming in the future.

Construction on vacant property may require further insurance

If your property will be vacant during upgrades, this could greatly affect your coverage. Home insurers typically don’t continue coverage on homes that have been unoccupied for 30 consecutive days or more. Depending on any written agreements you may have with your insurer, taking out unoccupied and vacant homeowners insurance is recommended while you’re away to protect you against any potential damage that may occur while you’re away. When you return to the house, you can stop the vacant homeowner’s insurance and resume your regular homeowner’s insurance.

Read: What you need to know about insuring an unoccupied property

The contractors should have insurance for their builders or workers - make sure you get a copy of their insurance

When upgrading your home, making sure that the company hired has insurance for its workers is important. You need to do your research before enlisting a company for renovations to make sure that you hire a reputable company. Asking for a copy of their insurance as proof is also important should anything go awry.

Added to this, understanding the limits of your liability coverage on your homeowner’s insurance will help you make provision should anyone get hurt while on the job.

Don’t be afraid to compare quotes

Lastly, always be open to shopping around for insurance quotes. Although you might’ve been with your insurer for 10 years, it doesn’t hurt to search the market for a potentially more beneficial policy.

Home renovations can be beneficial and add value to your home, however, it’s important to understand the mechanics of how upgrades can affect home insurance in order to be adequately covered.

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