Renovation insurance

For small renovations and DIY work, your home and contents cover could be enough to cover the project; however, cover is limited and varies significantly between policies and providers. Most providers will ask that you inform them of your plans in advance. For larger renovations, you may want to consult your insurance provider to see if they can be cover this and what exclusions may apply.

It’s worth noting that insurance providers will have varying thresholds for what kind of renovation work they need to be notified of and when they need notification, as well as caps on cost. Before starting any work, you should read over the relevant PDS for all inclusions and exclusions that may affect your reno job.

Demolishing a house (also known as knockdown/rebuild) may require specialised insurance. It’s important to discuss this with an insurer prior to taking out a policy.

Firstly, inform your insurer of your plans to renovate your house. Failing to inform them may result in claims you make being denied should you have a loss while the renovation is ongoing. Your excess payments and/or premiums could also be affected.

You should consider telling your insurer if you plan to leave your house vacant during the renovation period, as extended periods of vacancy may impact coverage under your policy.

It always pays to review the terms of your policy in the relevant PDS when considering renovating your home, so you can be sure of what you’re covered for.

Some policies will have a cap on the cost of renovations which may be covered by the policy (e.g. $50,000 – this may differ between providers). Other insurers may determine acceptability by the type of work being done during the renos, like refitting cupboards in the kitchen, repainting walls, pulling up carpets and replacing with tiles versus removing a roof or walls.

Your home and contents insurance policy may cover you for small renovations if they’re minor improvements (or cosmetic) and not substantially altering your house structurally.

Renovations that exceed the threshold for a small renovation under your policy can include any work that entails the compromising of any load-bearing walls or structure of the house, and so is likely to be a large renovation. There could be a higher chance of damage to your house during large renovations.

Your personal insurance options for such work may be limited. You may need to engage a licensed builder with builders insurance to cover their work and damage they may cause to your house or property during the renovation process.

If your insurance provider has given you the green light for coverage during your renovation plans, make sure any builder you hire is covered with their own builders insurance and licensed by your state’s governing body to protect you (and the builder) for loss and damage.

Any owner builders, contractors or tradespeople on-site carrying out work should be covered with public liability insurance through your nominated licensed builder. This is a legal requirement for all licensed builders.

If the renovation costs exceed a certain amount for the sum of labour and materials (approximately $3,000 plus GST), Home Warranty Insurance is required by the registered builder before they commence any contract works.

It’s highly recommended that you update the sum insured (i.e. the value of your home should you need to rebuild it), as your recently completed home improvements should have added value to your overall investment. Reassess your sum insured on your policy cover to ensure you’re covered for an adequate amount if it comes time to claim for loss or damages to your home.