Please note this article is for general educational purposes. You might wish to seek professional advice.
If you renovate a property, do you need a new home warranty once it’s complete? And what about insurance while work is taking place, and after it’s finished? If those questions sound familiar, read on to help your renovation go smoothly.
What is a home renovation?
Renovations include anything from cosmetic to structural changes, and everything in between.
You may decide to improve a property’s functionality. For example, by redesigning the kitchen to make better use of the space. Or you may look to enhance it visually. This could mean cladding a tired exterior, replacing flooring, or reinstating period features.
You may even decide to go all out and carry out structural work. This might involve removing internal walls or adding an extension to the kitchen.
Your motivation could be to enhance your home and make it more liveable. Or you may be looking to repurpose a property. For example, by converting a church into housing. Either way, you’ll want to add value and secure a return on your investment.
Whichever path you choose, it’s important to plan ahead. Think carefully about what you’re aiming to achieve and how best to achieve it. Set a realistic budget and think about the likely return you can expect.
What is a new home warranty?
New home warranties protect homeowners from a range of issues with newly built homes. You may also hear them referred to as a builder warranty. Most new build homes offer them, as mortgage lenders often require them.
They generally last for 10 years, although they’re often split into two sections. During an initial period of one or two years, the builder is responsible for fixing any problems. This may be due to poor work or materials, as well as structural issues.
The remainder of the 10-year period only covers major structural defects. This could be due to poor foundations, leaky roofs or issues with load bearing walls.
In the UK the National House-Building Council (NHBC) is the most well-known provider, covering 70-80% of new homes. Other providers exist though and offer varying levels of cover.
It’s also worth knowing what they don’t cover though. Wear and tear, weather damage and problems caused by poor maintenance aren’t generally included. Any changes you make after the warranty is issued also won’t be covered.
If your property has a warranty, make sure you’re aware of the terms and conditions, and how to make a claim. Delays could lead to more problems, so address issues as soon as possible.
It isn’t a legal requirement to have a warranty when you renovate a property in the UK. However, it’s worth considering, especially if you’re making structural changes.
Some mortgage lenders require a warranty if you plan to finance your renovation through borrowing. This provides them with security for their investment, should issues arise in the future.
As well as providing protection against defects, a warranty will offer you peace of mind. It could also provide security for potential buyers.
Speak to a warranty broker or consultant before beginning your project. They’ll be able to give advice on whether you need a warranty, and if so the most appropriate warranty for you.
What insurance do I need when renovating a house?
If you renovate a property, having the right insurance is essential. This will ensure your property and belongings are covered, as well as any other potential liabilities.
Types of insurance you should consider include –
- Home renovation insurance: covers your home during renovations. This includes fire, theft, and accidental damage. Most standard home insurance policies don’t cover significant renovations. Check your policy to make sure you know where you stand.
- Public liability insurance: ensure your contractors have public liability insurance. This will protect you against claims for injuries or damages that occur while they work on your property. It’s recommended that contractors carry at least £1 million in coverage.
- Contractor’s insurance: contractors should have insurance to cover accidental damage or loss. This should protect their equipment, as well as any damage caused during the renovation.
- Buildings insurance: your existing buildings insurance may cover some aspects of a renovation. However, it’s unlikely to cover extensive structural changes. Check with your insurer to clarify what your policy does and doesn’t cover.
- Contents insurance: review your insurance if you’re adding valuable items.
- Accidental damage: consider adding accidental damage coverage if you’re doing any work yourself. This will help protect against any unintentional damage you cause.
Before you start work, it’s important to let your insurer know about your plans. If you don’t, you may invalidate your policy if you need to make a claim.
Once you confirm your plans, you can update your existing insurance and arrange any additional cover you need. Make sure you explore all the options before you decide what to do. This will help ensure you aren’t caught out if problems occur.
For further information on this topic visit the self build and renovation section of our website.
