Home Renovation Insurance

Does anyone know what the deal is with house insurance while a home(with a mortgage) is being renovated and extended(not through a mortgage)? The building contractor has their own insurance and is taking full site ownership during the works.

Our architect thought the builder’s insurance covered things as they’re taking ownership of the house and site.

I’ve called a number of different insurance companies and had the following differing responses…

  1. You need to insure the final rebuild cost from the beginning.

  2. You are responsible for any fire that happens at any time the builder isn’t on site for both their new work and the existing house.

  3. The builder’s insurance only covers the renovation and extension, not the existing house parts they don’t touch. As you pay the builder each installment you gradually own more and more of the build so you need to insure the full price of the existing house and the building contract price too.

  4. You need public liability insurance in case there are any trespassers or visitors who have an accident. I thought the builder’s public liability would kick in here?

Anyone know what the actual situation is, or recommend a broker or insurance company who will actually know what is required and what would properly cover us if there was a worst case scenario. Thanks

Have you been in touch with your own existing insurance company? What have they said?

these are definitely questions for a broker
On 1. You need to insure the final rebuild cost from the beginning. - I would have thought that is correct

not sure about 2 and 3 but they sound plausible

  1. You need public liability insurance in case there are any trespassers or visitors who have an accident. I thought the builder’s public liability would kick in here?
    Maybe make sure your current policy cover PL - i would have thought it should, also im sure they would cover the renovations period if you add it onto the policy

A builder’s insurance only covers what it covers. A contractor will typically have three main insurances:

  • Contractor’s All Risks
  • Public Liability
  • Employer’s Liability

Contractor’s All Risks generally cover damage ‘on site’. Non-site is generally covered by your insurance. Your own house insurance could possibly be extended to cover a certain value of construction work. Definitely would recommend a broker for this type of stuff as they will tell you the benefits/costs of going with the different options.

It would also be worth checking with the architect about the insurance on the existing house. Employer (you) or the contractor can hold All Risks Insurance for a project. For example, if you doing a tiny extension to a massive house, it might be cheaper for you to get the cover. Also, there is a clause in the standard building contract regarding responsibility for existing structures.

My existing insurance is through a broker. The broker said we need to insure the value of the final house, as we gradually own more and more of it as we pay the contractor.

Our architect said this is not the case and usually house insurance goes down as the builder is responsible during works instead of the homeowner.

Tried another broker and they said that was incorrect information from the first broker. They said we need to insure the house final value as the builder’s insurance for the site is only during the hours they are actually on site.

Our architect said this is also incorrect.

You’re right to attend to the detail at this stage: most don’t and wait until it goes tits up only to find there’s a problem. Your builder, for example, will have to adhere to clauses in his insurance (for example: people have safe passes, that he runs proper health and safety documentation/systems, that he assigns people/himself to the appropriate project management roles. If not, and something goes wrong, the insurance co. have an out and you’re left holding the baby

There are responsiblities too as a house owner - you have statutory responsibilities to ensure things run as they ought to run. It’s not that you can simply sign over the builder and have nothing to do with it further.

I’d recommend you ask in the construction forum of boards.ie. Folk there will be far more conversant with the rules and pitfalls than on here.

Read through whatever you buy, by way of insurance. Carefully. And read through your builders policy too.

I was in this situation when I bought a complete wreck I couldn’t live in and needed to insure it before and during the rennovation which started a year later. I got vacant dwellings insurance which covered me for fire and public liability but nothing else. I used this broker aikenco.ie

You do need special insurance if the house is unoccupied.

fingalinsurance.ie/

We used these guys during our renovation and they had very good reasonably priced policies

Thanks for the advice.
@mocame - I spoke to Aiken and they were very helpful & knowledgeable on our situation.

It seems now the law has changed and homeowners can’t be responsible for trespassers having accidents once there is proper hoarding and security in place. Also, they advised we get a specific indemnity to principal letter from our contractor’s insurance policy to protect us. In this case then we only need buildings cover to satisfy the bank.

To insure the final rebuild cost from the beginning isn’t going to cost much and surely you have to do it at some stage in the near future on an ongoing basis - so getting that policy in place a couple of months early is a given?