How home renovations can impact your insurance - Allianz

by Martin McRandal | 2 min read    July 12th, 2021

No matter what type of renovation you undertake on your property, it is important that you notify your home insurer beforehand so that they can properly advise you of the impact on your policy. Here are a few ways that renovations have the potential to impact your insurance:

Physical risk

The process of renovation has the potential to compromise the security of your home. For example, it may be easier for a thief to gain access, particularly if you have moved out during the work. Your property may also become more susceptible to storm damage if your roof is being redone or repaired.

Your insurer will be interested in the specifics of the work being undertaken. They may need to advise you if there are any restrictions to cover and/or to apply conditions to cover.

Employers Liability

If you employ someone to undertake work, you have a legal responsibility to ensure a safe working environment and you can be legally liable for any injury an employee sustains as a result of your failure to do so.

Allianz home insurance policies covers your legal liability in respect of injury to domestic employees carrying out work on your home such as repair, maintenance, and decoration work. Home insurers may be unlikely to regard contractors carrying out renovation works to be domestic employees. This is true of an Allianz home policy, but if you are with another insurer, you should ask for clarification.

Before beginning renovations, engage with a primary contractor who is responsible for project managing all of the works. The primary contractor should then be the employer of all persons engaged in the works. Also, check that they have adequate Employers Liability insurance in place.

Public Liability

In your home insurance policy, public liability is your legal liability to others as owner and/or as occupier of the property.

Check to see whether your policy excludes liability during construction or structural alteration. This exclusion could mean that your insurer would be unlikely to accept liability for any claims where damage or injury is caused by contractors carrying out renovations. This could also include damage to the property of others or injury to others.

For example, if tilers are reroofing your property and a bit of scaffolding falls, damaging a car, or worse, injuring someone, your policy may not cover this damage or liability. So, it is important that you check that your contractors have insurance in place which covers their liability for damage caused to your property and to others.

Revision of Buildings sum insured

You have a duty to make sure that your declared sums insured are up to date. For buildings, your sum insured should meet the cost of rebuilding your home, including reinstating it to the same condition it was in before any loss.

In your home policy, buildings (or premises) cover is classified as the house including fixtures and fittings inside, as well as any additional structures on the property like a garage, pool, shed, etc. Your footpaths, walls, patio, plants, and lawn are also included so long as they’re within the boundary of your property. Make sure to consider these areas of your home in your sum insured.         

Building an extension is likely to increase the rebuild cost of your home. Putting in a new bathroom or kitchen may increase it, though to a lesser extent. Regardless of the nature of renovation, it is always a good idea to consider whether your current sum insured is adequate.

No matter what level of renovation you intend to undertake, it’s best practice to get in touch with your insurance provider beforehand to make sure that you have considered any implications for your policy and level of cover.

Learn more about Allianz Home Insurance.

Allianz p.l.c. is authorised by the Central Bank of Ireland. Standard acceptance criteria and policy conditions apply.

Martin McRandal
Business owner, consultant, and expert witness. Former motor and property insurance underwriter.