Commonly, the terms ‘remodel’ and ‘renovate’ can be used synonymously, but when it comes to insurance criteria for these developments, they are indeed two separate words with entirely different meanings. In this post, we cover what is meant by each term, what is covered beneath these terms according to types of work and the specialist insurance you may require should you be carrying out a remodel or renovation.
In a nutshell, to remodel is to create something new and to renovate is to restore an existing thing back to a previous state.
It’s important to know the difference between these terms so that you can correctly inform your insurer what changes you’re planning to make to your property to ensure you have the correct and sufficient cover for these home improvement works.
Renovating your property
Broadly speaking, renovate means to refresh your home with some improvement works and so this term would apply to anything from giving the walls a fresh lick of paint to installing a new kitchen or bathroom suite or even knocking down walls.
When you’re carrying out work, it falls into the renovation category if you are not dramatically changing the original design, layout or structure of your property but are making some alterations and updates. Regardless of the work you’re carrying out, you should be sure to inform your insurer as each individual policy has its own requirements of what works should be declared.
However, it’s important to remember that even if the work you’re carrying out doesn’t require big structural changes, it can add value to your home. If your homes value changes, then so too does your insurance policy requirements.
Your insurance policy should correctly align with the value of your home to ensure you have sufficient cover in the event of a disaster such as damage or theft within your home. This factor comes into play far more extensively when it comes to remodelling.
Remodelling your property
Remodelling refers to any big changes to your property, such as changing the primary use of a space, improving the functionality of a space (such as creating an open plan layout) or extending the square footage of your property.
So if you’re carrying out a project that fully transforms the layout, structure or design of a room or your entire property, then you should inform your insurer you plan to remodel parts, or all, of your property.
Changing the structure of your property can naturally be a risk, particularly in the eyes of your insurer. There are a number of additional damages that could occur to your property during the time your remodel is being carried out and so it is in the interest of your insurer to either increase your premium, or to advise you of a separate policy that you will require to ensure you are sufficiently protected.
What insurance do I need?
Naturally remodelling can be far more costly than renovating, but both forms of home improvement works do require additional insurance cover and what you need to declare will depend on your insurer, so it’s of paramount importance before you begin any work to inform your insurance provider of the changes you plan to make. If you fail to do this, then it’s likely that any claims you make will be deemed invalid.
You will need to inform your insurer of any changes, additions, alterations or renovations to your home and any changes to the cost of rebuilding your home. If you change the number of bedrooms in your property, again you will need to notify your insurer. If the policyholder moves out during the works, the insurer will need to be aware of the change of address. Other things that must be declared are changes to the contents sums insured if they’ve been moved to a separate address during works, changes to the fire and or security arrangements or protections and the purchase of any unfixed materials. You must also declare if you have entered a contract that, in any way, limits or removes your legal rights against a building firm or contractor.
Typically, renovation and remodelling work requires additional covers or an increased premium to be added to your current home insurance policy, and in some cases will require an entirely new specialist policy, such as the Works or Renovations insurance that we provide here at Ellis David.
What does works and renovation insurance cover?
This specialist policy is for anyone planning to remodel or renovate, making structural amendments to a property, including projects such as:
- An extension
- A loft conversion
- A basement or cellar
- Complete refurbishment
- Replacing, repairing or renewing a roof
- Demolition and reconstruction
This list shows just some of the potential projects that require specialist insurance cover, however, any works carried out that will alter the structure, size or value of your property will require you to inform your current insurer.
It may seem a small inconvenience to have to take out new insurance cover during the time of your works, but it actually benefits you in many ways and you will be particularly grateful for having taken out the coverage in the event you need to make a claim.
These benefits include having a singular policy that covers all aspects of your home during ongoing works. It also means that in the event of a claim, you have a consistent basis of settlement, with only one provider to communicate with and only one excess payment to make.
Having one insurance policy to cover your home and your planned work also means the removal of any grey areas into what is considered existing structure and what is considered new works materials, to ensure all entities are protected. Our specialist policy even covers you for the cost of alternative accommodation for any works required following an insurance claim if your property is uninhabitable.
In summary, small renovations such as decorating will not require further insurance cover, however refits, installation of new kitchens or bathrooms or anything that significantly changes the design of your home will require additional cover and the generation of a new home insurance policy following work to reflect the increased value of the property.
Remodelling work will almost always require an additional, specialist insurance policy to make sure that all aspects of your home are covered during planned work.
Need further help figuring out the level of insurance cover you require? Our friendly team is happy to help guide you in the right direction, get in touch today.