Planning on renovating your home? Whether you have applied for a building loan, hired a contractor or are doing your own renovations, you should take steps to protect yourself with the proper insurance.
Taking out a building loan?
To apply for a building loan, you need your ID, proof of income, a quotation or tender from your builder, building plans, a schedule of finishes and a contract between yourself and the builder. For all new homes, your builder, contractor or sub-contractor must be registered with the National Home Builders Registration Council (NHBRC) and must have contractor’s all risk insurance cover, with the bank’s interest noted.
Doing your own renovations?
If you are undertaking your own renovations, it is best to consult with your insurance broker because some remodelling projects – if not correctly carried out – may void your homeowner’s insurance policy.
You should ask your broker if you need to purchase a builder’s risk policy for the duration of your project. Such a policy covers construction equipment and materials on your property prior to installation so you are protected against, for example, copper thieves.
A contractor general liability policy will cover damage to existing property but not any new work. For example, if you are turning a veranda into a new room and there is a malfunction in the new wiring that causes fire damage to both the existing and new space, a general liability policy will pay out only for the existing structure. Make sure you or your contractor are fully covered so that your project can be completed.
The risks of renovating yourself
Even a small home repair job can carry risks which make it critical for all homeowners to carry worker’s compensation cover. A small slip from a ladder can cause the death or permanent disability of any labourer you have hired and can expose you to the risk of being sued.
The best way to protect both yourself and your contractor is to have all the works of the contract covered. You can secure public liability and surrounding property cover up to the value of your house.