Is special insurance for house renovations and building really needed? Yes, yes it is.
Building a new home or renovating your house is an exciting time. However, when your house is under construction, it’s also at risk.
Personal lines insurance products don’t cover everything. Insurance companies build in specific exclusions for three important reasons:
- The risk is considered uninsurable like damage from war or nuclear explosion
- The insurer doesn’t want to cover it
- The risk is more appropriately covered by another insurance product
Reason #2 & #3 both apply when it comes to personal insurance products providing coverage during a home renovation or new build. More specifically, here’s an actual and typical exclusion in a Canadian homeowners insurance policy.
Homeowners insurance policies typically void all coverage should a loss occur during construction or a significant renovation.
For this reason alone, more people need to ask “do we need special insurance while our house is being renovated or built?”
Here’s a real example of a Canadian Homeowners Insurance Exclusions wording:
“But we do not insure loss or damage: occurring while the dwelling is under construction or vacant, even if permission for construction or vacancy has been given by us;”
How does specialized insurance work while a house is being renovated or built?
Fire, theft or other damage to property and or materials on the construction site is a major concern for home owners, contractors and subcontractors.
That’s why builders risk insurance is specifically designed to protect the property while under construction. Builders risk insurance also picks up where homeowners insurance stops.
Another major risk for homeowners while their house is being renovated or built is someone accessing the construction site and getting injured. This is also excluded by the homeowners construction exclusion which is why wrap-up liability insurance should be place by the homeowner.
Talk to us before you renovate or build. We can help you get ALIGNED with the best builders risk and wrap-up liability insurance options while your property is renovated or built.