As your Pinterest home renovation board starts filling up, so does your excitement. Giving your home a new look is an enticing project; from transforming your kitchen to knocking down walls to expand a room, new designs help home owners fall in love with their nest once again.
Whilst the finished product sounds glamourous, the effort required and works-in-progress might present their own risks. Many property owners find themselves worried following the current construction climate in Malta. Luckily though, preparation is key and your insurer can easily guide you what you need to make this process smoother.
Why does insurance factor in when doing construction or renovation?
Amidst the process of looking for construction or renovation professionals, home owners might forget to consider whether their home insurance is enough. The simple answer is NO.
Whilst no one likes to think about something going wrong, being realistic is the best first step to take. If a wall collapses or a pipe bursts, a fire breaks out or damage is accidentally done to your neighbour; without the proper insurance you could be facing a lengthy legal process and thousands of euros forked out.
Ask your insurer about Contractors All Risk insurance.
Don’t get scared from the word ‘contractors’. Whether you’re doing the renovations yourself or getting professional assistance, if you are commissioning any works, you’ll be referred to as ‘the contractor’.
A Contractors All Risk insurance is a policy designed to cover physical works and potential third-party claims that might arise from construction or renovation. Even if your renovation is minimal, think about the headache that might come with a water flood should the works you undertake burst a water pipe whilst breaking through concrete.
Your standard home insurance policy covers your own property in its existing format. Any construction-related incidents would NOT be covered. Hence why a Contractors All Risk should be your first consideration.
What does a Contractors All Risk cover?
This policy may span depending on the coverage provided by your insurer but normally would include coverage for material damage and third-party liability.
Material damage refers to physical accidental damages to tangible property. If a fire breaks out, theft takes place, natural disasters or construction accidents that happen on site, a Contractors All Risk comes into play.
Third-party liability protects a home owner against legal claims should someone get injured as a result of the construction or renovation works, or even if a neighbouring property is damaged due to these works.
It is a comprehensive policy, meaning it offers full coverage to home owners. Which makes it a requirement for major construction and renovation works. Consider your peace of mind and financial security first when things don’t go as planned.
Who should consider this policy?
The word ‘contractor’ does not imply that a Contractors All Risk insurance is reserved for property developers or contractors only. If you’re a homeowner, and you’re undertaking works within your property, this policy is right for you.
Such a policy should be considered before works start, to ensure you are protected from the first stone you turn. Waiting for works to start can make your eligibility void or limit the coverage offered. Keep in mind that general wear and tear or damages following negligence would not fall within grounds of coverage.
Discuss the full details of your renovation with your insurer once all permits are in hand, as they will tailor the policy to your needs and flag any grey areas before the works starts. Ask whether such a policy can be capped for a specified duration or can be renewed after a particular period.
What are the most common renovations that will benefit from a Contractors All Risk insurance?
You might be thinking, “Is this policy worth considering for my little project?” The answer is YES. Even the smallest change can open a door of accidental damages… and it is definitely not worth the risk. Consider some of the following renovations that will benefit from a Contractors All Risk insurance.
If you’re building an extension to your home, be it a room instead of an extra roof, a facelift to your façade, a new ensuite bathroom or even adding a cover to your terrace, you are essentially disrupting the existing structures of your home. Such work normally entails structural work, electrical and plumbing additions, and use of heavy machinery.
If you’re effecting internal alterations such as knocking down walls, setting new beams, or even digging into floors, the risks run quite high. Remember that internal walls, floors and ceilings often hide pipes and wires. Even if you have a plan of where everything is passing through, a small human error can cost you dearly.
Now that summer is around the corner, many home owners might feel like fixing their roof for some memorable nights under the stars. Truth is, roofs are sensitive areas – a tile could fall over and hit a pedestrian, or damage done to your ceiling that leads to rainwater damaging your home.
Replacing windows or doors is another renovation projects that becks extra coverage and protection. Works might look straightforward, but home owners might discover structural damages once they start replacing existing structures.
If you’re undertaking major plumbing or electrical renovations, consider this a very risky project. Previous faulty installations or outdated wiring could easily cause damage to your property and neighbouring ones.
If you’re planning any demolitions, however small they might be, think twice before proceeding without coverage. Even if it is just taking down an internal wall or replacing a fireplace, damages could occur to structures or even share walls.
What’s the lesson?
Your standard home insurance is necessary long-term, but never assume short-term renovations will just be covered by default under your current policy. If you’re engaging contractors to carry the work, they might have their own insurance. This however, will only cover their own equipment, liability and employees. Not yours.
Speak to your insurer to get an extension to your Contractors All Risk policy to not only cover the new renovation but also the rest.
Does it sound like something you might need?
Our insurance executives are happy to assist and provide more clarity about any considerations you might still have. One thing you should have sealed is the need for a Contractors All Risk whatever renovations you’re thinking about.
Remember – accidents happen. More often than you think. Be proactive and seek guidance from those who have seen it all. We’re just a call or message away.