Do I need renovation insurance? How to ensure your project runs without a hitch.

If you’re in the midst of planning for a large scale renovation, you’ll know first-hand that there are many areas to consider and questions to answer when undertaking a large scale renovation project. From costs and contractors to timings and resources; all factors surrounding your project need to be carefully deliberated.

 
One factor that often isn’t an area of consideration is renovation insurance – but why is this the case? Worryingly, an estimated 82% of homeowners are completely unaware their home insurance doesn’t cover them during renovation works. This means that, in addition to project related risks, standard risks such as fire or theft are no longer covered whilst your property undergoes renovation. In the worst case scenario, you could be completely uninsured.

Another common mistake is automatically assuming that the contractor’s Public Liability insurance will cover third party property damage or injury whilst works are taking place. It’s important to bear in mind that, if you are involved in any aspect of project managing contractors on site, the liability could fall on you should things go wrong. We can advise you whether or not you will need to buy liability cover in addition to your contractors cover.

So, how do you avoid the pitfalls of limited insurance during your renovation project? The clue is in the name – have you considered Renovation Insurance? Dedicated cover to protect your property and the works during your renovation. Renovation Insurance Brokers offers the most comprehensive cover for projects ranging between £50,000 and £50,000,000.

Be covered with specialist insurance, handled by a specialist team

The insurance market can be a very confusing place, with various brokers and insurers all vying for your business. Working specifically and only in the contract works sector, we pride ourselves on offering a specialist service dedicated solely to these projects. With over 25 years’ of industry experience, we’re confident we can offer you the best insurance available on the market.

If a renovation project is on the cards for you, our underwriters would be happy to have an informal chat to tell you more about renovation insurance and share insights on project considerations more widely. Contact us here.


Underinsurance – under the spotlight

RenovationUnderInsuranceThe term underinsurance might not be one that’s familiar to you, but it’s a significant issue in our industry. In our latest blog, we tell you what it is, why it’s an issue and who needs to be aware of it.

What is underinsurance?
In a nutshell, underinsurance is the provision of inadequate sums insured by the holder of an insurance policy. When you take out a renovation insurance policy, you are required to confirm the ‘rebuild’ value of the property (and any contents) that you want to insure along with the ‘contract value’ – a figure representing the total cost of the project to you. These figures are known as “the sums insured”. It’s important that the sums insured are correctly assessed.

In some cases, whether deliberately or not, the policyholder will declare a rebuild cost and/or a contract value which is lower than it should be. When this occurs, we call it underinsurance.

In the event of any claim, the confirmed sum insured value is what an insurer will pay out against. If that sum has been significantly underestimated, the claim pay out will be significantly reduced too. And in situations where the sums insured are grossly inadequate, the insurer is actually entitled to void the policy altogether.

We work very closely with brokers and renovators every day to identify the correct sums insured for new renovation projects; removing the very real risk of underinsurance. If we work with you, here’s what we’ll run through with you:

Building Sum Insured

We can guide you on the rebuild cost for a property in the event of a catastrophe. This figure is not the same as the ‘market value’ because the market value includes the price of the land your property sits on and other factors such as curb appeal.

  • Rebuild values are generally lower than market values for the reason stated above, but in the case of listed property, particularly Grade II* and Grade I, the reinstatement costs per square foot can be so high that the rebuild cost actually outstrips the market value.
  • We include VAT on the rebuild cost. Although new builds don’t attract VAT, most losses are only partial losses and, in these circumstances, VAT is applicable to the reinstatement costs.
  • The rebuild cost for a property can often be found on existing schedules of insurance, mortgage paperwork and/or formal building surveys. But bear in mind that, particularly in the case of existing schedules of insurance, there is no guarantee that the figure is correct. Additionally, if the documents referred to are more than a couple of years old, the figures are likely to be out of date.
  • Failing any of these, a rough idea can be gained by inputting a property’s square footage and postcode into the Building Cost Information Service (BCIS) from the Royal Institution of Chartered Surveyors (RICS).
  • If additional help is needed, we’d advise the instruction of a professional valuation, which would usually be around a few hundred pounds plus VAT for a standard property. Though this cost may stick in the throat, it will seem like money well spent when compared to the financial consequences of underinsurance.

Works Sum Insured

In a large scale renovation, a property owner or developer will be responsible for a number of costs and fees. We insure the total works sum – the total cash cost to the client – which should include:

  • the value of the main contract
  • the value of any subsidiary contracts
  • associated professional fees
  • direct purchases (such as bathrooms, kitchen, fittings etc.)
  • VAT where applicable

What happens if a renovation project is underinsured?
If a property owner or developer is in the unfortunate position of having to put a claim in for loss or damage to a property and/or the works themselves and there’s not enough insurance, there are going to be some serious financial implications.

Underinsurance is generally discovered when the loss adjuster appointed by the insurer turns up on site to assess the loss. He or she will, as a matter of course, and early on in the process, assess the adequacy of the declared sums insured.

If a property is found to be underinsured, the pay out for a claim is reduced in proportion to the percentage of underinsurance. For example, if a building is insured for £800k and it should have been insured for £1 million, then it is 20% underinsured. A claim for £10k would therefore be settled at £8k. A £2k shortfall that the insured is responsible for.

In the event of a large scale loss, a claim pay out may not cover the total cost of any rebuild, leaving the policyholder personally responsible for picking up the shortfall at a time of great disruption. Even worse, a large shortfall of funds made available in the claim pay-out may even leave the policyholder unable to complete the project.

Underinsurance isn’t something to be swept under the carpet. If a policyholder is underinsured, and attempts to make a claim, they will be found out. Make sure the property is adequately covered from the outset.

If you are looking to undertake a large scale renovation or are involved in a client’s renovation project, contact Renovation Insurance Brokers to discuss the insurance requirements. As the market leader in the sector, we are experts in placing renovation insurance. We’d be delighted to help you with yours.


A look back at 2015

As we reach the end of 2015, we reflect on just some of the many things that have made our year here at Renovation Insurance Brokers.

We have spared you a RIB family photo with the office dog and hibernating tortoise but just wanted to share a few of the highs that made 2015 a great year for us, as we hope it was for you too.

A big thank you

None of what we do, we’d be able to do without you – so give yourself a hearty round of applause for being so supportive, at times understanding, but always committed to doing the right thing for your clients. Your faith in us and ability to advise your clients accurately sets you apart. Together we are a winning partnership.

As always, it’s been a very busy 12 months. We are very proud of our achievements and are pleased to share just some of our highlights here.

– Broker portal. Our unique broker portal has been very well received in the broker market since its launch last year and we have been pleased to see it continue to grow in popularity this year, as a key part of the quotation process. The quick quote system allows our brokers to get an immediate premium indication for some very basic information – obtaining renovation insurance quotes for their clients more quickly than ever before.

Interested in using the quick quote system for yourself? Take a look at this article for more information on how our Broker Portal works and to request login details. Don’t forget, we also offer bespoke CPD training too.

– Product development. We launched a brand new fixed price product for the broker market this autumn – specifically developed to offer a more marketable solution to insuring renovations in the mid net worth (MNW) sector. For brokers operating in the mid net worth sector this new online only policy provides the same market leading cover, at a very low price and is expected to prove very attractive.

We can now also offer ‘all risks’ unoccupied building insurance for properties which will be undergoing works, but at some point in the future. These properties do not fit onto the Renovation product immediately because the time period between the need for the Buildings cover and the start of the project is too great (max 2 months). The introduction of our new ‘all risks’ cover has been developed to offer a solution to projects that sit in this growing area. Just another example of our understanding of the market and our drive to develop products and services that offer you the very best options.

– New team members. Our team continues to grow so that we can provide the service levels you need. Just like last year, this year we were pleased to welcome two new members to the Renovation Insurance Brokers team.

Chris Harris arrived with us in October, as an additional underwriter to support our growth; with responsibility for underwriting all products as well as further developing business relations with the wholesale market.

Naweed Darr joined us as a marketing intern this summer and is now our full time Marketing Executive, helping us to maintain our strong brand and to communicate with you in a way that makes sense.

– Increased communications. Keeping in touch with our stakeholders is hugely important to us. This year we’ve introduced two new LinkedIn groups – one for HNW Brokers and another for Architect’s working with high value renovations – to educate, to inform and to facilitate online networking within each of our key markets. This very website has been enhanced too – to offer a clear proposition to the three key groups we work with – Architects, Brokers and Renovators.

– Charitable work. We’re proud to have continued to show our support for Grief Encounter, Rise Africa UK and The Game and Wildlife Conservation Trust (GWXT). Each of these three charities makes real impact in each of their individual areas and we are pleased to be able to work with them on a regular basis and raise awareness of the good things they do. To find out more about the different charities that we support, please take a look at our Good Causes page.

– Utilising our renovation expertise. Once again, this year has seen us place insurance for an array of high value, unique renovations. We always see a real mix of projects across a large geographical area – but one thing is consistent within them all; all being in need of an expert approach to their challenging insurance requirements.

In just a very small illustration as to what we’ve been involved with this year – we’ve provided cover for projects in the South of France as well as a growing number of central London properties, particularly basement projects which require large scale excavations.

We were also delighted to be chosen as the insurer of a stunning stately home on a remote Scottish Island this year, one with a project budget of over £20,000,000. Our very latest activity, finishing the year on a real high, is our work to insure the renovations of a £50,000,000 dwelling in London.

In summary: 2015

When looking back on the year, it’s always hugely rewarding to see where our successes lie, but more importantly, what impact we have had for the clients we serve. We are very proud of the strong and long established relationships we hold and the value we add to each and every project we have the pleasure of being involved in. Thank you to all of you who have helped to make 2015 such a fantastic year here at Renovation Insurance Brokers – we look forward to the activity ahead in 2016.

From all of us here at Renovation Insurance Brokers, sending you our very best festive greetings and wishing you a happy, healthy and prosperous New Year.


Increased underwriting capacity to support rising demand for specialist insurance cover.

We are pleased to announce the arrival of an additional underwriter to support our growth. Chris Harris has joined existing senior underwriter Matthew Dover in the team at Renovation Insurance Brokers.

Chris will be responsible for underwriting all products – using both manual and portal systems – and will also further develop and foster business relations with the wholesale market. Chris already brings strong underwriting skills to the team, built up during his four years as an underwriter at Renovation Plan.

Speaking of Chris’ appointment, Douglas Brown, Managing Partner of Renovation Insurance Brokers said: “A large scale renovation requires a very specific renovation policy and the market requirements continue to grow. With the addition of Chris to our experienced underwriting team, we are able to continue to work to the high standards we pride ourselves on and offer the very best and competitive insurance solutions for brokers and their client’s renovation project professionals.”

After an initial period at our offices in Cambridgeshire, Chris will be based at our office at Holland House in London to support our growing work in the city.

News of this new recruit comes on the back of another announcement from Renovation Insurance Brokers last month – the launch of a new online fixed price product for brokers operating in the mid net worth renovation market.


Proud to be a high net worth broker involved in the Insurance Age HNW Forum event

HNW

As the broker market leader in renovation insurance, our central focus is on placing the very best insurance for large scale renovations across the country. We work with a substantial network of high net worth brokers to provide the widest cover for each and every renovation project.

We are delighted to be attending the Insurance Age High Net Worth Forum in London today to understand more about future trends, share best practice and network with others in our sector.

One of our personal highlights for today’s event is the keynote speech from Robert Hiscox, founder of Hiscox, who will be discussing the history of the insurer and outlining his views of the HNW market.  His keynote will focus specifically on how a high net worth broker can really stand out…something that we try to do each and every day.  Here’s how.

Our approach is bespoke. When we are working with a broker partner or their client’s project professionals, we provide a completely tailored service. We work quickly to decide on the most appropriate cover for their large scale renovations.  We listen more than we talk, to find out as much information as we can about the project from the start. We are advisors first and foremost– providing consistent and relevant solutions for insuring a renovation project and help define exactly what risks are involved.

We don’t just focus on customer service – but excellence. For us, it’s all about customer experience.  As Robert Hiscox stated in his pre event article, what people want now, more than anything, is to ring up and get someone who talks to them and knows their situation. We completely agree.  Technology may have driven more and more online, but sometimes you can’t beat talking to someone.  And not just anyone, but an expert who fully understands your requirements – even if you don’t.  That’s us.

Brokers are important to us.  Our broker partners are incredibly busy. They want to chat about complex cases but need fast solutions for simple projects.  We have invested in a number of online offerings specifically for our brokers. They know they can always pick up the phone to speak to us but can also head online to obtain a very quick indication of premium when they are speaking to their client.

We want to share our renovation insurance knowledge.  For property renovating clients, the development of a large scale renovation may be a once in a lifetime experience. However, for a broker it may be something they see regularly – but always with different requirements.  Our renovation, liability and party wall CPD training gives a deeper understanding of this very specific insurance; it outlines potential challenges and helps brokers be confident about what they are recommending. To encourage dialogue, we’ve set up a dedicated LinkedIn group for high net worth brokers to provide ongoing support and wider networking for those working in these sectors found here.

We are proud to assist the high net worth broker market and look forward to seeing everyone at this unique sector event.  We’ll be sharing online insights and input throughout the day, which you can follow live through Twitter here.

Read the full pre event article with Robert Hiscox at Insurance Age online.


Extending our product range for the broker only Mid Net Worth sector

MNWNEW

We are proud to announce the launch of a brand new fixed price product for the broker market. The new product has been specifically developed to offer a more marketable solution to insuring renovations in the mid net worth (MNW) sector.

Called Single Premium MNW, this online only offering is available to brokers from Renovation Insurance’s unique online portal. For brokers operating in the mid net worth sector this new policy provides the same market leading cover, at a very low price and is expected to prove very attractive.

The Single Premium MNW policy covers existing structures up to £450,000 and works up to £250,000, property owner’s liability to £2,000,000 and non-negligent liability (Party Wall cover) to £250,000. The cover is for a maximum of 12 months and all this at a single premium of £950 including IPT.

Renovation Insurance’s unique broker portal has been very well received in the broker market since its launch in June 2015 and Single Premium MNW extends that online offering and brings quote turnaround times down further. The portal enables broker partners to obtain an immediate premium indication for some very basic information. This gives brokers an edge over their competition who may have to wait days for a quote. The client is engaged early and broker partners appear more efficient and responsive.

Douglas Brown, Managing Partner of Renovation Insurance Brokers said: “Over the last five years we have seen the renovation insurance market grow significantly. We worked very closely with our broker partners to come up with the market leading renovation policy for the HNW sector, but have known for some time that we serviced the MNW sector less well.”

He continues: “As innovators in this market, we have worked hard to develop this unique product to provide an exciting new insurance offer that is easy for brokers to recommend both in terms of cover and price. It still won’t be the rock bottom priced product out there but for the genuine MNW customer there is no better value to be had in the market.”

Brokers who are interested in using the Renovation Insurance broker portal need to have a Terms of Business Agreement with Renovation Insurance Brokers and the relevant login details. Underwriting criteria for the Single Premium MNW policy requires the building to be of a standard construction, not listed, to not involve basement works and have a clean claims history. Other terms and conditions apply.

If you are a broker that operates in the mid net worth renovation market, we’d love to tell you more.  To obtain further product details or to arrange a demo, just call 08442 641200 or email us here.

 


RIBA Stirling Prize – Why should renovations make the shortlist too?

Astley Castle, RIBA Prize Winner 2013

The shortlist of six buildings has recently been announced for the 2015 RIBA Stirling Prize, with the winner being announced on the 15th October.  This year, like many years past, the list is mainly made up of new structures, with only one partial renovation featuring.

We have a keen interest in architecture, as you may imagine, and we always look forward to the RIBA Stirling Prize each year – but we think renovation builds are under-represented. Continue reading…


Renovation gone wrong: what caused London’s Holborn building collapse?

holborn_building_collapse_m

We’re sure you were just as surprised as us to hear news this week of a six-storey building that collapsed in central London’s Holborn area. We’re also certain you were as curious as we were about finding out exactly what had caused this unfortunate event. Continue reading…