Having to insure your renovation works mid-project is not ideal, but may be necessary for a variety of reasons. Find out more about what you need to bear in mind when insuring a partially completed project and how we at Renovation Insurance Brokers can help.
Whether it’s due to your contractor having gone out of business or, more commonly, because the renovator in question didn’t realise that specialist cover was required for their property renovation works, you could easily find yourself in a situation where you need to insure your renovation project partway through.
Although many insurers may be unable to cope with such insurance underwriting requirements, our team of insurance professionals are able to offer a solution.
What insurance information do we need from you?
Before we can begin the underwriting process on your partially competed project, we’ll need to take down a few details. This includes information relating to:
1. Any insurance claims already made during the project so far.
2. The amount and type of work that’s already been completed on site since the renovation process began.
3. How much work is left outstanding on the project.
How we can help insure your incomplete project
Once we’ve collected the few details outlined above, we’re then able to set about making sure that your property is adequately insured. We take the following into consideration when underwriting your renovation project:
– Sum insured: We start by amending the sums insured so that this figure reflects the amount of work that’s already been undertaken during your renovation.
– Building sum insured: To take into account any work that’s been carried out to date, we’d then need to raise the building sum insured amount.
– Contract works sum insured: Next, we would need to lower the figure for contract works sum insured by the amount of money that’s already been spent on the renovation project.
– Policy period: The new renovation insurance policy will then be adjusted to reflect the remaining period left until completion (not the entire period of the project since day one).
Insuring partially completed projects: an example
The way we work in such instances, is to make sure that the existing structure is insured for its rebuild value midway through the project and not its rebuild value on day one of the project.
For instance, where a project is undergoing an extension and internal refurbishment project, at day one the buildings sum insured would be £1m and the works sum insured, £500K.
However, coming to us part way through the project for insurance (having already spent £250K on the extension) we would then calculate the buildings sum insured as being £1.25m (£1m plus that £250K spent on the extension). The total contract works sum insured would then come out as £250K (£500K minus £250K already spent on works) – since the internal refurbishment work would still be left to do.
Further insurance considerations
Where the project was originally managed by a main contractor (who has since gone bust or the renovator has decided to finish off the project themselves using a series of tradespeople) then it’s highly likely that the renovator in question will need an additional form of cover, known as project public liability insurance.
This may have the effect of increasing insurance costs somewhat. This is especially the case with urban projects where project public liability is carried at a higher level in urban projects than in rural projects because of the proximity of other high-value properties.
To learn more about the costs of insuring your partially completed project, please don’t hesitate to get in touch with us. Our team of renovation insurance specialists are always more than happy to help with your queries.