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Stop! Think Before You Renovate

Kiwis are flat-out renovating to boost the value of their homes. But if something goes wrong, you might not be covered, says Richard Godman, Vero’s Manager of Technical Underwriting for Consumer Insurance.

8 October 2021

Kiwis love to improve their properties, to make them more liveable and to increase their home’s value.

Since we were locked down in our homes, we’ve seen a hike in people doing DIY work around their houses.

However, many people don’t know that any type of home renovation – whether it’s a project so large you’re moving out for months, or you’re just knocking up a deck on your weekend – can have an impact on your house insurance.

In the worst-case scenario, if something goes wrong, you might not be covered at all.

Here are some things to think about before you start.

1. Check your house insurance policy for any exclusions.

You may not know that most house insurance policies won’t cover major renovations, but some (including Vero) will cover minor, non-structural work. It’s a good idea to check your policy to see what the limitations are.

For example, Vero’s house insurance policy will cover you for non-structural work costing less than NZ$25,000, things like adding a small deck.

However, you won’t be covered by your normal house insurance for anything that involves adding on to the home or taking off roofing or cladding.

2. Take out any extra cover you need (like Contract Works).

If you’re doing major work, you might need additional insurance, like the Contract Works policy offered by Vero.

This will work with your normal home insurance and cover any damage caused by the renovations.

Most Contract Works policies will come to an end once your renovations have a Certificate of Completion or Code of Compliance issued.

It’s a good idea to get Contract Works cover from the same insurer that holds your house insurance policy. This makes it more likely that you’ll have seamless cover between your different policies.

3. Notify your insurer.

Regardless of the type and value of the work, it’s a good idea to let your insurer know you’re doing it. They’ll be able to agree to maintain your cover to give you peace of mind, or let you know if you might need extra insurance.

4. Make sure tradies are covered too.

If you’re getting work done by builders, electricians, contractors, or other tradespeople, check that they have public liability Insurance in place, and find out what other cover (if any) they have.

That means if there’s damage, faults, or issues caused by their work, their insurance could help out.

The information about a tradie’s insurance should be in their Conditions of Contract, so it’s a good idea to sort out your arrangements in writing.

5. Update your insurance when it’s done.

If you’re doing some work on your home, you’d hope it might increase its value. Changes may also affect the amount of money you’d need to rebuild your property if it’s damaged or destroyed.

Once your work’s done, use an online calculator or a registered professional like a quantity surveyor to check your rebuild estimate.

Then you can update the sum insured on your house insurance policy, so you’ll have enough cover if anything goes wrong.

If you have house insurance with Vero, contact us or your broker to talk about any renovations you’re planning. www.vero.co.nz.

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