How home renovations affect your insurance policy
Home renovations can be an exciting but also a stressful time. An upgrade to your home will positively affect the value of your home which will affect the insured value of your home. Therefore, when you are planning any renovations to your home, be sure to first call your insurance broker.
It is important to involve your broker before you start with any renovations as you will probably need additional insurance while the renovation is in progress. Remember to check if your project manager has their own liability cover, otherwise you may need to foot the bill for any damage caused by them.
Additional liability cover will not be necessary as you probably have property owners liability included with your domestic policy but you may need a Contractors All Risk policy to be in place while major renovations are taking place.
A few of the most common home renovations include the following:
Bathrooms and kitchens are the most popular projects for home renovation. An adjustment to your homeowners’ insurance policy will almost always be necessary since these renovations will probably involve upgrading the layout and finishes which will require additional insurance to reflect such upgrades. If you live in a sectional title complex, you will need to inform the trustees of your renovations so they may include this in the schedule of replacement values.
Expanding your home by building an additional room to accommodate a growing family will require an amendment to your insurance policy. If you are planning to rent out the additional space, your tenants will need to take out their own house contents insurance as their possessions will not be covered by your policy. Either way, you are probably increasing the value of your home and this warrants a call to your broker.
A pool can be a very attractive feature for any home but unfortunately it also increases the risk profile of your home as well as your exposure to loss.
Remember to increase your homeowners’ insurance to include the value of your new pool. Your pool will be covered under the building section of your policy where you should already be covered for liability. In some areas, there are strict by-laws where a pool fence and gate are required.
Some insurance policies offer special clauses, warranties and endorsements under the Home Contents section. In this case, your House Contents cover can be extended to include sudden and unexpected damage to machinery of swimming pools, Jacuzzis, boreholes, sprinkle irrigation systems, electric gates and garage doors. Theft of swimming pool cleaning equipment can also be covered. Cover for laundry, garden and swimming pool equipment, furniture or implements from the premises of the dwelling, is limited to R10 000 of any one claim.
A new roof can be one of the most significant and expensive home improvements you can undertake, as well as the single most important factor affecting your policy. Be sure to talk to your broker about the kind of work you had done on your roof and how this will affect your existing policy.
Working from home with just your laptop and printer will not have an effect on your homeowners’ insurance but if your business requires some additional equipment or machinery, you will need to include those business assets in your policy.
Goods and equipment used in a small home office are included in contents cover but if it exceeds 10% of the total sum insured, you will need to obtain a business policy. Professional Indemnity cover will be necessary if you are offering advice to clients; in this instance, you need to consider buying a business policy.
In conclusion, whatever exciting improvements you are planning to your home, be sure to phone your broker for advice as you want your home to be comprehensively insured to protect your family and all your valuables.