A comprehensive guide to home renovation insurance

Home renovation is very common, and it can be hard to choose a favourite interior design company. In addition to budget and design, you must also take into account the specific needs of yourself and your housemates. There’s a lot to consider, but people often overlook the importance of renovation insurance, also known as interior decoration insurance. 

Why should you take out renovation insurance before carrying out renovation works? To start with, there are many potential hazards in the renovation site, and accidents may occur, ranging from damage to property or casualties in serious cases. Related claims may bring a heavy financial burden and corresponding legal liabilities. 

Renovation insurance can provide protection to help owners cope with monetary losses, compensation and legal liabilities caused by accidents, so that the project can be smoothly completed. There are several types of decoration insurance, and the amount of coverage depending on your insurance company, coverage, and protection plans. Therefore, it is important to know what items are covered when purchasing a renovation insurance plan. 

The two main types of renovation insurance are material damage insurance and third-party liability insurance. The former covers the owner's own losses, including damage to renovation materials (flooring, tiles, sanitary ware, etc.) due to accidents or theft during the renovation period. Any damage is usually insured by the interior design company. 

Third-party liability insurance covers legal liability, litigation expenses and compensation for bodily injury or property damage to a third party caused by negligence during the renovation period, or damage to public areas. This type of insurance can be purchased by the owner or interior design company, but only one plan can be purchased per flat. 

It is worth noting that regardless of whether the insurance is taken out by the landlord or the renovation company, you need to check details including whether both parties' information, the validity period of the policy is the same as the expected date of commencement of the works, the number of insured employees and the nature of their work are listed on the policy to protect your rights and interests.

Renovation insurance does provide protection, but some accidents under specific circumstances are generally not covered. For example, scaffolding and external wall works to replace window frames, and external wall pipes are not covered by most third-party insurance policies due to the higher risk involved. If you have such works, it is advisable to take out additional cover for scaffolding when taking out a renovation insurance policy. 

In addition, insurance companies may not be willing to cover properties that are over 40 years old, as the building is in a state of disrepair, which makes it riskier during renovation. Even if an insurance company does underwrite the policy, the premium may be higher and the sum insured may be adjusted. 

If a property is being renovated, do homeowners need to purchase additional renovation insurance? Yes – this is necessary because home renovation insurance is not comprehensive enough. For example, third-party protection only covers family members. This means that the insurance company will not compensate for the losses of any third party as a result of an accident caused by renovation workers. 

Each renovation insurance policy has a different scope of coverage. Therefore, before purchasing, you must carefully read the terms of the policy and understand the policy contents before signing the contract, to avoid bearing additional losses. 

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