Building or Renovating?
Changing family structures such as taking care of ageing parents and grown children staying at home for longer are driving an uptick in home building renovations. Added to this, the tougher economic climate means that home owners are opting to renovate and upgrade existing premises, rather than shop for new ones when their needs change.
While a property renovation is an exciting time and is likely to add more value to your home, it also comes with many stresses and inherent construction risks that need to be factored into your insurance planning. So after you’ve met and signed off with your architect and builder, schedule a call with your insurance broker and get the peace of mind that your renovation project is properly covered and your additional risks are taken care of.
“When renovating your home, you may be making material changes to the structure of the building as well as the security conditions, and these changes can impact the risks that you are insured for. There is likely to be breaking down of walls and supporting structures, not to mention many contractors and strangers on site, which poses unforeseen risks in terms of security, potential damages and possessions stored onsite. It’s essential to advise your broker so that your cover is extended to protect you for the additional risks while your home is under construction. Failure to do so could result in problems at claims stage due to the change in risk during the period of renovation,” explains Mandy Barrett of insurance brokers and risk advisors Aon South Africa.
Aon provides the following important tips when renovating your home:
- Always use a reputable building contractor that is registered with the Master Builders Association and that builds according to the national building regulations. Having your builder disappear half way through the project with your money, or a structure collapsing due to faulty workmanship and design won’t be covered by your insurance. It’s always a good idea to contact references and the builders association for background checks.
- Also make sure that you have your plans for the building project drawn up by a reputable architect or draughtsman. obtaining building plan approval prior to the commencement of your project and the inspection of building sites by municipal inspectors are essential in ensuring that the minimum standards of health and safety are adhered to as well as to ensure that such alterations and structures comply with all necessary laws.
- That beautiful new deck and the porcelain tiles that you bought on special and put into temporary storage need to be covered for storage as well as In Transit risks such as loading and unloading mishaps and theft or damage during transportation to the construction site.
- The cement delivery truck that took down your neighbour’s wall by mistake makes it crucial to check whether you are covered for these types of mishaps. Even if the contractor was found to be at fault, you still need to lodge a liability claim; your insurer will attempt to recoup the loss from the contractor’s insurer.
- When drawing up a construction contract, check for any defects liability or maintenance conditions that may be listed and make sure that you understand what the contractor or sub-contractor are liable for as far as loss and damage are concerned.
- A very important consideration is that of safety of workers on the property and damages and liability relating to worker injuries on site. Make sure that contractors have the relevant safety measures in place as well as insurance for their workers. You should also review the amount of liability cover you have and if necessary, consider increasing the amount during the renovation period.
- Fires happen more often than many realise at construction sites, so make sure that you are covered for any damage to third party property or injuries sustained as a result of a fire at the construction site. This will also apply to any other premises that may be temporarily occupied during your build.
- Always do renovations to your home with security in mind, making sure to add burglar bars and gates to any new opening windows and doors and extend your alarm system to cover the new additions. If walls are coming down or your roof is coming off during the build, hire additional security to protect the premises at night. Always let your broker know of the change in risk so they can negotiate cover with Insurers.
- With so many people having unfettered access to your premises during the build, some insurers will restrict cover for theft of movable items only if forcible entry into or out of the premises is evident. Always remove and safely lock away valuables during renovations.
- Once your renovation is done, check with your broker that your homeowner’s policy reflects the new updated replacement value of your property to avoid being underinsured.
“Navigating the insurance word soup of your construction insurance contract can be challenging on top of all the other stresses you have during a renovation, so talk to a professional broker for qualified advice and real life experience of similar situations to provide perspective. Your broker can advise you how to reduce the incidence of losses, improve your risk rating and make sure that all possible risks are accounted for, and you get to enjoy your newly renovated home without any regrets,” concludes Mandy.
Northern KZN Get It November 2017