Renovations & Building Insurance: How to Adjust Your Cover

For many South African families, a home is more than just bricks and a roof; it's the foundation of family life. But as your family grows and changes, so does what you need in a home — this often means renovation, such as making a room larger or modernising bathrooms and the kitchen. However, as you adjust your home to your needs, you must also adapt your Building Insurance to reflect these changes. At Auto & General, we support you in making your house a home. This article explains how and why to adjust your coverage when renovating your home.

Understanding the impact of renovations on your Home Insurance

There are several ways in which renovations to your home can affect your Home Insurance. Depending on the scale of the renovations, the property's value could increase. Not adjusting your cover to reflect this could leave you underinsured, resulting in out-of-pocket expenses when making a claim. However, some renovations might lower your risk profile — so while the value of your property has increased, your monthly premium could remain unchanged or even decrease.

Before you even start renovating, you need to ensure you have approved plans1. Many alterations to your home require planning permission from your local municipality. Carrying out unapproved alterations puts you at risk of fines from the planning office and could result in your insurer rejecting all claims relating to the renovations. This could be anything from water damage in your new bathroom to fires resulting from electrical faults.

Unless you are qualified to carry out the work yourself, you will need to have one or more contractors on site for the renovations. Ensure they are all skilled and have their own liability cover. This not only protects you against claims for injuries or accidental damage, but it also protects you against faulty or non-compliant work. Your insurer could reject a claim if it is found that the incident was due to defective workmanship.

Finally, you also need to consider the heightened risk of theft when it comes to insurance for home renovations. Building materials stored on-site are most at risk of being stolen, but some work could leave various entry points to your home unsecured. Your standard Home Insurance policy might not cover this unless previously discussed with your insurer.

Risks to watch out for during home renovations

Insurance for home renovations is not something you discuss with your insurer only after they've been completed. You need to discuss your plans — and adjust your cover — ahead of time, as renovations expose you to several risks.

Knocking down walls could compromise your home's structure, even when all necessary precautions are taken. You also need to consider your movable property being stolen or damaged during renovations. Your Home Insurance during renovations might exclude theft without forced entry, while there could also be specific exclusions relating to damage to home contents.

Being aware of these risks and adjusting your cover accordingly ensures you are comprehensively protected during and after renovations.

Common renovations that will affect your insurance and what to do

Home Insurance typically consists of two products – Home Contents Insurance and Building Insurance. Depending on the type of renovations you are having done, both types of insurance could be affected: 

• Extensions and Additions: These increase the cost of rebuilding your property. You will need to update your Building Insurance to reflect this higher value.

• Kitchen and Bathroom Upgrades: These might increase not only the value of your property but also the contents. High-value fittings and appliances need to be considered, along with any possible increased risk of water or fire damage. Speak to your insurer about updating both Buildings and Home Contents Insurance.

• Roof Replacements: New roofs can lower premiums due to improved security but could also require specific coverage during construction.

• Swimming Pools: Pools increase liability risks, which could necessitate policy adjustments. In addition, a newly installed pool could also affect the surrounding landscape, increasing the risk of structural damage.

• Solar Panel Installation: This adds value to your home, affecting your Building Insurance costs.

• New Border Wall: Building or renovating the border wall of your property could affect your risk profile. Inform your insurer of this and any other security upgrades you make that could possibly lower your premiums.

Don't assume your insurance offers the same level of coverage during renovations, especially for the new risks that renovating introduces. Speak to your insurer ahead of time to make the necessary adjustments — and repeat this consultation once all work has been completed.

Assessing your current coverage against the new renovations

When carrying out home renovations, it is essential to reassess your Building Insurance to ensure it matches your home's improved value and features. You can evaluate your coverage gaps and risks by taking the following steps.

• Compare your current coverage limits with the post-renovation value of your home. Ensure it is adequate for rebuilding in the current market.

• Look for policy exclusions, as some renovations might introduce new limits, such as claims for certain types of water damage or structural changes.

• Check if your policy covers construction risks, including theft and accidents on site.

• Verify that renovations comply with current building codes, as non-compliance can impact coverage.

• Identify temporary risks that will apply only during renovations.

Discuss all identified gaps and risks with your insurer to align your coverage with your home's new status, keeping you fully protected during and after the renovation process.

How to do a post-renovation insurance evaluation

Evaluating your insurance post-renovation can prevent underinsurance2, where your coverage might not fully protect your new investment. Consider how renovations, especially structural changes or significant upgrades, have altered the value and risk profile of your property.  

Reassess your Building Insurance to reflect any increase in property value. Ensure the coverage matches the new value. Consider any additional risks introduced by the renovations. You might want to consider getting your home professionally appraised post-renovation to assess its value accurately. Consult with your insurance provider to understand the impact of renovations on your existing policy and to adjust coverage accordingly. 

It's also important to update your Home Contents Insurance. Your insurance inventory should include new items or upgrades to ensure comprehensive coverage. Keeping detailed records of all renovations, including contracts and receipts, is crucial for future claims. 

Get a Building Insurance quote from Auto & General

As your home changes, so should your insurance. Contact Auto & General for an updated Building Insurance quote to adjust your policy. And enjoy the peace of mind that comes with knowing your family and home are well-protected.