Insuring home improvements

When undertaking building work, talking to your insurer could be the most important 10 minutes of the whole building project

Hands covering a toy house. Home protection concept

Growing numbers of homeowners are opting to improve their homes rather than move this summer, but if you are planning to change your property, make sure you let your home insurer know.

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Here’s what you need to know about buildings and contents cover.

Buildings cover

When buying buildings insurance, make sure you don’t confuse your property’s market value with its rebuild cost, as this could mean you end up paying more than you need to for cover. Research by insurer Direct Line, which analysed property prices for three-bedroom homes across 12 major cities, found that the average house price of £277,608 is 59% higher than the projected rebuild cost of a similar property, which is £164,000.

You can check your home’s rebuild cost using the Association of British Insurers’ and Building Cost Information Service’s rebuilding cost calculator.

According to financial information business Defaqto, many insurers will automatically include a very high ‘Sum Insured’ to protect homeowners against rising rebuild costs. However, three quarters (276 out of 381) of policies are ‘bedroom-rated’. This means that insurance cover and cost is based on the number of bedrooms a property has, so building an extension or converting a loft could potentially invalidate your cover or mean you move into a higher insurance bracket.

Brian Brown, spokesman Defaqto, said: “When you are considering or undertaking building work, talking to your insurer is probably the last thing on your mind but it could be the most important 10 minutes of the whole building project. There have been some high-profile cases where insurers have not paid claims because homeowners invalidated their cover by adding extra bedrooms and not telling them. Every policy is different and so its always best to run any planned work by your insurer before you begin.

Contents cover

When working out how much cover you need for your home’s contents., don’t just focus on valuable items, such as electrical goods or jewellery. Remember that if your house were to burn down, you’d need to be able to replace everything in it, including things like clothes, bed linen and kitchen crockery.

Don’t forget to include garden furniture or ornaments too, as these are often a target for thieves. According to Lloyds Bank Home Insurance, it received 580 claims for theft from gardens last year, with 149 of these made during the summer months.

Tim Downes, senior claims manager, Lloyds Bank Home Insurance, said: “Whilst homeowners will remember to insure their indoor belongings, having the right cover for outdoor items can be forgotten.  These items are often easier to steal as they are left outside, in plain sight of burglars. Outdoor belongings can also be just as expensive as the contents of the home.”

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Make sure you declare any particularly high value items, either inside or outside your property. A spokesman for Zurich said: “Most home and contents policies have a single item value limit, usually around £2,000, and will not cover anything above this unless it has been declared. Check your policy and speak to your insurer, this will mean your treasured possessions are protected if the worst does happen.”