Is our home insurance valid when we do extension?

We are doing an extension and complete renovation of our house, which involves gutting it and doing building and roofing work.

We have to go out for six months while this is happening. What should we do about our building insurance?

I understand we need to inform the insurer, but will the building insurance cover us at this point and will we have to pay a large additional premium?

How do you insure your home when doing a major renovation? Or should we just rely on the manufacturer’s liability insurance?

Sam Barker’s This Is Money Answer: Our reader is taking the plunge and wants to commission major upgrade work on their long-term home – but this pushes them into the world of non-standard insurance.

What’s the best way to get peace of mind that their most valuable asset is safe and insured?

Here are a few points to address. Does the homeowner’s current building insurance cover them for the planned work, can it be extended to do so, or do they need entirely new cover?

Also, can they rely on the manufacturer’s insurance or not?

Although our reader’s query is focused on building insurance, there is also a contents insurance issue as it will cover the property.

It’s Money spoke to an expert to tell our readers what to do to stay safe before big building jobs.

Andrew Gibbons, managing director of insurance broker Mason Owen, said: ‘In terms of an extension and total reform, the first red flag would be if it is a standard family insurance product. A member of the public is likely to have gone online and bought a basic family insurance contract. If not, their insurance broker will be able to advise them on this.

‘Standard product insurers will want to be involved in renovations of this amount, especially if the home has been empty for a period of time, which is rare. So when this person makes a disclosure, they shouldn’t be surprised if their insurer tells them they won’t be covered during renovations.

‘If an insurer says yes they may limit cover and possibly charge an extra premium. The property will be left vacant, it may be exposed to the elements and there is a greater risk of fire with people working on it.

‘As projects get bigger, people use something called a “standard form of building contract”. It determines who will insure what – the home owner or the builder or the architect and things proceed from there. But on the downside, most of the time projects don’t have it.

This Is Money’s Sam Barker added: The homeowner is advised to contact their existing insurer or broker and ask if their existing home insurance policy can be amended to cover it during the work.

If not, they should take out a specialist type of insurance called ‘building in course of alteration insurance’ or sometimes ‘extension’ or ‘renovation’ insurance.

Homeowners should inquire with their old insurer about cancellation of their home insurance for the renovation period and reimbursement due to change of occupation.

When it comes to builder’s liability insurance, Gibbons notes that it may not be as effective as the consumer imagines.

Builders have – or should have – employers’ liability and public liability insurance.

But the former covers only the builder’s workers, while the latter does not protect the home owner’s home because the presumption is that public liability will cover the building itself. It may not be!

‘The subject of building work is the building, and thus may not be covered by public liability,’ said Gibbons.

‘Public liability contracts will cover the builder’s liability in managing the site while it is under their control, rather than paying for damage to property being worked on. The customer must also prove negligence, which can be difficult in a building situation. Generally, it is the property owner’s responsibility to insure the existing structure.’

Homeowners should also make sure they have builder’s ‘all risk contractors’ insurance. It covers all contracted works and materials used for renovations that are fixed to existing structures that are separately insured or unfixed.