Renovators Insurance

Why you need insurance but don't have it
Why move, when you can renovate? It's the Australian way. And if there was any doubt about that, figures from the Australian Bureau of Statistics verify that renovating accounts for nearly half the total value of construction work across the country each year.

The risks and responsibilities in renovating and not far different from building a house, and yet large numbers of renovators don't have any insurance. Home owners often think, “we already have an insurance policy, and renovating is pretty common, therefore our policy probably covers renovating.' Unfortunately, this is just not true. Home/Contents insurance policies have exclusions specifically so that the insurance intended for a normal domestic situations does not extend to covering construction risks.

Questions you should ask your domestic insurer if you hope to rely on that policy:
Does the policy cover:
- Public Liability claims that arise out of a renovation?
- any loss or damage to your existing home that happen as a direct (or indirect) result of a renovation?
- the new structures while the project is not yet completed?
- anything at all during your renovation? *

* that final question may shock you, but it's a very serious one. Beyond being aware of the policy's exclusions and limitations, you also have the very important issue of "duty of disclosure" that forms part of the insurance. Where there is a significant change in circumstances that affect the risk you must tell your insurer. They then have the option to cancel your insurance.

What's not covered
What you should have taken from the above exercise (assuming you have now asked your insurer these questions) is that during the course of your renovation project the following things are not likely to be covered by your regular house and contents insurance policy: public liability claims, new structures, building materials, and even your existing house and contents.
Putting that slightly cynical summary aside, there certainly are some major concerns as I'm sure you'd agree. And we've only touched very lightly on some of the bigger problems.

So what's the solution?
Take out appropriate insurance!
Some providers of this insurance use two separate names for this type of cover; "Owner Builder Insurance" - for those constructing a complete new house, or "Renovators Insurance" - for alterations and additions to an existing house. Most providers however do not make this naming distinction, instead catering for both these types of project under the one banner of 'Owner Builder Insurance', with or without covering for existing structures.

Basic cover
The most basic form of owner builder insurance will cover: 1) public liability, 2) any new structures you are erecting, and 3) building materials.
We strongly advise you to take out the above insurance as an absolute minimum. The down side is that it won't provide any additional cover for the existing house, which you're likely to need.

Including cover for existing house
This is the recommended solution. It offers the same cover as above, but is also inclusive of cover for the existing structure.
Some owner builder insurance policies will provide the 'existing structures' option as a partial cover (i.e. damages arising directly from the project), and optionally a more comprehensive cover for losses that do not relate to the works. Depending on how much your existing policy is going to exclude, you may need this extra level of cover.