Money, money, money – The importance of accurately planning your renovation and keeping to budget

With a four-year restoration project silencing the bongs of Big Ben on the 21st August, the government reported in spring of 2016 its restoration project of the iconic London clock would come it at £29 million. Over a year since cost estimates were established and just under two months since the project began, Parliamentary authorities have now reported that the cost for the renovation project will double to an estimated £61 million, as shown in The Independent.

So often when starting a renovation project, many people do not know where to begin with estimate costings. Naturally no one wants to go over budget, but so often failures in accurate estimations can lead to increased costs, unexpected costings and in some cases unwanted additional fees. With Big Ben’s cost doubling in less than two months on task, it goes to show it’s not just inexperienced renovators who end up going over budget.

To help prevent going over your budget, we present to you our top tips for budgeting your renovation:

1. Have a contingency budget
Have a contingency budget of 20% — so if you would like to spend £50,000, then work on costs of £40,000 and keep that remaining £10,000 for contingency. Certain items may be inevitable and in turn eat in to your budget more than expected. Ensure you set a budget, and once your budget is set make your renovation design choices based on that – and not beforehand. Once your budget is set, you will be able to establish if your renovation goals are achievable within that range.

2. Avoid adding to the jobs or changing your mind halfway through
A fairly self-explanatory point to note. But as you may expect, changing your plans during your project can lead to additional costs. Moreover, altering plans when working with professionals can also incur extra fees from the changing of plans, additional time then needed for the project and lastly additional work from staff on site.

3. Utilise building calculators to help support your estimation costing
Whilst still not offering completely defined costings, utilising a building calculator such as this one can help enlighten inexperienced individuals to establish rough costing ideas for renovations. An estimation calculator can be a good starting point to research likely costs where you may be uncertain as to how much materials and renovation tasks may cost – and in turn helps to work out if your budget aligns with your intended plan.

4. Don’t forget about the hidden/unseen costs
Whilst from the outset, your renovation project may appear to be relatively clear and simple, don’t forget about hidden costs that may occur from your project. For example if you are looking to remove current fittings in your property, don’t forget about the removal of excessive rubbish. Skip hire costing are often forgotten about and can take thousands of pounds out of your budget depending of sizing, time needed on site and collection and removal from your property.

5. Invest in renovation insurance to cover any unexpected damages affecting your costs.
Naturally damages or issues can occur whilst renovating a property, which in turn can create additional costs. Protecting your property upfront with dedicated renovation insurance is essential – providing peace of mind if any insurance related issues do arise during your project. Find out more about the principles of renovation insurance here.

It’s a surprise to many that their property renovation is not likely to be covered by standard buildings insurance. We discuss just some of the risks that will not be covered in this article.

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.

CPD training – the key to keeping brokers motivated?

It’s no secret a happy employee is a productive employee – and that goes no matter the sector your business is based in, including insurance. Statistics from the University of Warwick in 2015 revealed that happy employees can be as much as 12% more productive than their unhappy counterparts. So can your business really afford to employ unhappy brokers?

But how to keep your brokers happy and therefore motivated?

A simple Google search can reveal numerous tips and tricks to keep your employees happy, with suggestions such as flexible working, showing appreciation and team building all frequently being advised as methods to increase staff happiness. Another recommendation that can sometimes be missed is fostering career development. Providing your staff with additional training makes your employees feel valued and that you genuinely care about their career development.

This is where Renovation Insurance Brokers come to the rescue of brokers around the UK. We offer CPD (Continued Professional Development) training to brokers covering all aspects of renovation insurance in the sector. Our training is completely free and can help re-motive your employees by providing additional industry insight and a firmer understanding of the end client’s perspective when undertaking a large scale renovation project.

The course content is highlighted below:

• An introduction to Renovation Insurance
• Renovation Insurance challenges
• Existing Structure Insurance
• Contract Works Insurance
• Liability Insurance
• The Party Wall Act
• JCT Insurance Clauses
• A briefing on the interaction of insurance and JCT
• CDM regulations
• Online content & broker portal

Courses are running between September-December this year; taking place on a variety of dates around the country. The two hour session can run at a time that’s most convenient for your organisation, and its engaging format works well for little or many.

Ready to get your broker workforce more engaged? Take a look at the current dates and express your interest online here. Alternative dates and locations can also be offered should timings not be best suited to your employees. Please note that a current Terms of Business Agreement (TOBA) with Renovation Insurance Brokers is required in order to benefit from this free CPD training opportunity.

Digging deep – our latest look at mega basements in renovation projects

Fears about basement excavations aren’t new, with local residents often concerned with what can be years of building work misery. What is new though is the emergence of Local Neighbourhood Plans which set guidelines for development in a particular area – and the plans for this particular basement are said to go against Camden’s new Local Plan. The Local Plan, adopted by Camden council on July 3, states that basements must not be built under existing basements.

It remains to be seen what conclusions come from this new row. One thing we can conclude though is it’s evident that digging deep with a basement excavations is still very much in the minds of property owners and developers.

Interestingly, it’s not just homeowners with limited land that are considering this approach either. Only this month, the Guardian has reported that former farm land in Hounslow is “set to get the ‘mega-basement to end all mega-basements’ as £50m-worth of gravel is excavated to create the UK’s biggest subterranean space, with a new public park on top”. Not quite a renovation project nor the type of basement excavations that we’ve seen in London so far, but a clear example of the continuing desire to gain more space in city locations and the excavation approach that makes it possible.

Planning a renovation project and considering a basement excavation as part of the development? If so, you’ll find our article on key insurance considerations for basement conversions will make interesting reading – outlining the top questions to ask and answer before any basement project gets underway.

The only way is All Risks

Trying to explain to a client who purchased an unoccupied property insurance from you some time ago that they are not insured for anything but fire, aircraft, explosion and earthquake at the point of a claim is always tricky.  Sure, if you have backed up your advice at the time with the right sort of words, then your firm’s PI policy will be in the clear, but if you haven’t it’s likely that a client who perceives that they have no place to go financially may decide to pursue you.

Clients have a habit of taking the cheapest option much of the time but not really understanding, beyond the premium, what the implications of that decision are until it’s too late.  Some time ago we decided that we would not sell limited perils insurance for existing structures however badly our clients remonstrated about the premium of an all risks cover.  What we found is that the vast majority are willing to pay for all risks if they understand clearly what the differences are between the two policies and why we don’t offer them.

Offering FLEA products focuses the client’s mind away from the cover considerations and firmly on premium.  When you take this advice in the context that less than 20% of our claims are fire related, you’ll understand why taking a firmer line at the point of sale is doing you and your client a favour.

New research highlights clear gap in property owners informing home insurers of renovation plans

New findings from GoCompare have made the papers in recent weeks, with research recently commissioned highlighting that a large number of property owners are not informing their home insurers of the renovation plans.

The research states that 43 per cent of UK homeowners have carried out major work on their property in the last five years, but 41 per cent of those have not informed their insurer of the changes made.

Having not informed their home insurer, it means those who splash out over home improvement works are at risk of invalidating their insurance policy – for renovations such as a new bathroom or kitchen, or installing a new boiler or central heating system. As far as we’re concerned, it’s not a deliberate act to deceive or miscommunicate with their insurer – most property owners just won’t know that they should. And that’s the most worrying thing.

As an expert in placing renovation insurance for high net worth properties across the country, we can’t say we’re surprised. In fact, we think it’s a sign of a clear trend more widely – in terms of the distinct lack of awareness and understanding in this whole area. What is surprising in all this though is that people have no idea of the risks they and their properties are under without the correct insurance in place.

It’s exactly the same scenario in the high net worth property market, where your standard home insurance definitely won’t cover the work. With works undertaken being so vast and costly, if you don’t have specialist renovation insurance, you’re not covered at all.

A big risk, a huge issue – but not widely known.

GoCompare’s findings very much mirror our own experiences here at Renovation Insurance Brokers. We regularly talk to customers about the need for renovation insurance to cover their works; an important part of the process but not an area that’s widely known about. Even when property owners are spending in excess of £500k and up to the millions on their property renovations, insurance doesn’t always get considered.

This has got us thinking – and the true percentage across the whole market may actually be much higher than the GoCompare figures state, when you take into account the large scale renovations market too.

Here’s a list of just some of the risks that will not be covered by your standard buildings insurance include:

  • Fire or damage to property caused by your contractor’s negligence
  • Any damage to your neighbour’s property as a result of your renovation works
  • Instability due to potential structural changes
  • Theft of valuable building materials on site
  • Property being exposed to the elements due to an open roof
  • Burst pipes before the project is complete

Our advice? Before undertaking any form of property renovation, ask the question and have the conversation – whether that be with your existing home insurer for small works, or your architect or project manager for larger ones. Not being insured is not a risk that’s worth taking.

Read the full GoCompare report here.

Renovation Insurance Brokers features at Grand Designs Live London

The Grand Designs Live show in London has shut its doors for another year – and once again thousands of individuals descended on London’s ExCel to be inspired and educated for their current or upcoming building project. In our last blog, we wrote about our pride in being invited to be part of the Ask the Expert session taking place during the show. For our latest article, our Managing Partner Douglas Brown offers his insights and perceptions on an event that included his contribution for the first time.

“Our whole business has been built on offering high value renovation advice to those who need it – so to have the opportunity to do this on a larger scale at the highly regarded Grand Designs event was truly wonderful. The event was incredibly well organised and full of innovative manufacturers and designers; all beautifully presenting their products and approaches for builds and renovation projects of the future.

The exhibition halls were packed – but the Ask the Expert panel area, less so. The opportunity to speak directly to experts from across the spectrum was hugely underutilised.  That was surprising in itself – but even more so was the fact that only individuals who had suffered a serious loss were even thinking about the insurance angle.

Individuals that have experienced an insurance problem, now have their eyes wide open to the risks and vulnerabilities – and rightly wanted to protect themselves this time. But what about for those who didn’t come and see us? Like so many other renovators across the county, with their future renovation, they are sleepwalking into risk.

We provided our expertise over three days of the show, and had good conversations with over 20 people.  I heard first hand from a couple that had lost everything in a fire to their renovated property that wasn’t covered – and are now having to work tirelessly to rebuild it with no insurance pay-out. They were keen to tell me their story to tell me of the damage that it had done both literally and emotionally, and to tell me they wish they’d understood what was needed to be fully protected.

Thanks for having us Grand Designs Live. We had some very good discussions – but it was clear from speaking to current and future renovators face to face that there is a huge lack of awareness on the insurance requirements and technicalities during a renovation. I was pleased to be able to educate the few on the day, but for the many – our work goes on. I can’t reiterate enough the risks there are to your renovation without the proper insurance in place.” – Douglas Brown, May 2017

You don’t need to wait until the next Grand Designs show to ask our experts about your renovation project and its likely insurance requirements. Give us a call on 08442 641200 to speak to one of our team about your plans – we’d be happy to advise you.

Planning a Major Renovation to your Home? Make Sure You Have It Covered

Renovation is booming, particularly at this time of year. If it’s on your agenda, don’t let your home upgrade leave you financially exposed. That is the advice from our managing partner Douglas Brown, the founder of Renovation Insurance Brokers, and the figurehead at the forefront of a new initiative to make sure home owners are appraised of the facts.

If you are thinking of spending £100,000 or more on an upgrade to your home it is essential to make sure you have specialist insurance cover. Douglas was recently invited to speak on this very topic as one of the ‘Expert Panel’ to visitors of the 2017 Grand Designs London Live at ExCel, an event based on the hugely successful Channel 4 TV series presented by Kevin McCloud.

As experts in building contract compliant insurance, we work to ensure a property is protected during the renovation process.  One of the key issues encountered is that the home owner often doesn’t understand what insurance is needed because it’s not just house insurance.

Unfortunately, it is often only in the event of a problem that the lack of insurance is brought to life; when it’s so desperately needed but not in place.  Douglas tells us more: “A recent example we heard of was a new water hydrant blowing in the basement of a new renovation.  The home owners discovered that their insurance only covered fire or lightening, when what they really needed was an all-cover risks for works and buildings.  It’s a very costly mistake to make.”

With the high costs and inconvenience involved in moving, it’s no surprise that many people are deciding to renovate their homes instead.  Basement developments and loft extensions are increasingly popular renovations, especially in sought-after postcodes.

However, there is very limited public awareness that standard building insurance is not likely to cover any renovation costing £100,000 or more. That is why having project building contracts properly insured is critical, because of the potential pitfalls of unforeseen renovation problems being hugely costly if it is not in place.

Renovation Insurance Brokers solves the problems of adverse risk and unpredictability by providing home owners with specialist insurance. We cannot reiterate strongly enough how important it is to ask the right questions of your advisors regarding insurance, before embarking on their renovation plans. If you’ve got any questions for us, we’re ready to answer them. Get in touch.

Proud to be part of the Grand Designs Ask the Expert panel

Here’s a question for you – who’s advising you on your renovation project? If you are planning on undertaking a large scale renovation in 2017 or have a large project underway, you’ll need good advisers around you.

The project team that you are working with are likely to have experienced renovations like yours before and you are likely to have chosen them due to that clear expertise. But for you, it’s perhaps your first time – and in fact, possibly the only time that you’ll be living and breathing the renovation process.  You’ll learn a lot as you go along, and lots of that learning will come from those who are working on the project with you. Ask their advice, listen to their suggestions, do your own research and if needed, get a second opinion.

In a blog last year, we talked last year about the importance of advice in the planning of renovation. We’re delighted that our plea has been heard, with our Managing Partner Douglas Brown invited to participate in a popular Ask the Expert session at this year’s Grand Designs Live.

Based on the hugely successful Channel 4 TV series, Grand Designs Live runs from Saturday 29th to Sunday 7th May at Excel in London. In the Ask the Expert area, Douglas is one of just a few handpicked professionals invited to be part of the event; to offer support, advice and reassurance to some of the thousands of visitors due to come through the doors during the exhibition.

In adding renovation insurance to the already popular Ask the Expert sessions, Grand Designs Live is demonstrating to its visitors how important advice really is in the renovation process. In our business, we know first-hand how important it is to get renovation insurance agreed before a renovation project begins – but most renovators do not. To have the opportunity to advise them in this area is something we are hugely excited about. We’ll share more in a wrap up report after this year’s event!

Attending Grand Designs Live and have a question to ask a renovation expert? See details of all the experts involved and book their time online here. If your renovation project is large scale, we’d recommend you have a chat with our Douglas on the day, to understand exactly what your obligations and potential challenges may be. You can book a slot with him directly here.

We know not everyone will be able to make it to Grand Designs Live – so don’t forget that we are on hand at any time to talk about your renovation insurance enquiries. If you’ve got a renovation insurance request or enquiry right now, you can get in touch with our expert team here.

Top 10 Tips When Selling Renovation Insurance

It’s important to understand why customers buy insurance and why they choose a broker to buy it from.

The former is pretty clear for two reasons:

  1. The subject of the insurance is something they cannot afford to lose.
  2. They don’t know what’s going to happen in the immediate future.

So we solve the problems of adverse risk and unpredictability by providing them with insurance, in this instance for their home undergoing renovation. But why do they choose a broker to buy it from?  On the face of it everyone seems to have forgotten the answer to this question and it has nothing to do with price.

  1. The customer doesn’t understand what insurance is needed because it’s not just house insurance.
  2. The customer doesn’t know where to get this type of insurance.
  3. Nobody in a call centre understands it either.

So the client comes to you, usually late on in the pre-project period and makes an enquiry for JCT compliant insurance what should you do?  Are there any steps you can take to make the sales process smoother and less painful for you both?  Yes there are.

Try the following:

  1. Be direct and say that the insurance required is non-standard and only provided by a few underwriters, because most insurers decline.
  2. Make it clear that the reason for this is because of the claims record of property undergoing works.  Very large infrequent losses which are difficult to predict.
  3. Insurance companies like predictability in risk and this just doesn’t fit with their appetite.
  4. Reassure them that you will be able to arrange something in time.
  5. Use the quick quote calculator to provide an range of premium.
  6. If they are unpleasantly surprised make it clear that their home is becoming a building site and doesn’t represent a home any more.
  7. Say that the cost will be offset against the buildings insurance they would have had to pay, it’s not in addition to it.
  8. The cover includes their works and property owner’s liability which is important when riskier things are happening on the site.
  9. The JCT places an obligation upon them to insure and it’s better to stay in control of their largest single asset.
  10. The product that you are proposing to them is the closest thing to a good quality HNW home insurance.

These simple tactics give you time to win them over and help them understand what the implications of insuring badly are.  They also give you the opportunity to show your expertise and prove your worth to them.

At that point you are a respected and trusted advisor who can help them solve a very specific problem, you are providing value for money, which is what professional brokers do!

Main & Sub-contractors: Could Conflicting Joint Names Insurance Terms Expose Your Client’s Cover?

It’s important when the client’s contractor is joint insured that they understand the terms under which they and their sub-contractors are operating.  The intention of our policy is to insure the works and the structure from top to bottom, particularly when a JCT joint names contract is in place.

The problem arises when a client does not cascade the terms of the insurance to the contractors who are working for them, yet expects them to be bound by the policy terms and conditions.  This makes subrogation harder if a negligent act breaches a policy condition and, in the longer term, leads to higher rates for all.

Given that the intention of the wording is to insure the contract, whosoever undertakes the work (contractor or sub-contractor), it’s important that other contractual arrangements don’t get in the way.  As an example, if a main contractor’s terms and conditions specify that any sub-contractors are responsible for materials and their work until the end of the contract, it’s possible it could obstruct a payment being made on the basis that the client was not contractually obliged to insure the works; not great. Your client is not going to be happy if his own insurers tell him he has no cover, and that he should pursue the sub-contractor’s own works policy.

To cut this situation off we recommend that your clients advise their contractor of the insurance placed by them and send them a copy of the policy schedule and wording.  At the same time they should make it clear that the intention of the policy is to insure all works under the contract and that any terms stating otherwise between the main contractor to sub-contractors should be withdrawn.

We’ll be issuing guidance notes for main contractors very shortly to go out with all policies and would like you to help us make sure these filter down to contractors and their sub-contractors by pointing this situation out to your clients.

Whilst this introduces another layer of complexity to the arrangements, it does make sure that the lines of liability are clear such that claims can be settled quickly and fairly, whilst leaving the door open for subrogation if required.

In our upcoming policy review we’ll be looking to firm up this area by making it clear within the wording that regardless of the terms under which sub-contractors are operating, ours is the primary insurance and will react if an insured event occurs.

If you would like further information on this topic please email Douglas Brown on .