One in three insurance policies invalid due to home improvements

Could your Insurance Policy be Invalid?

by Richard Moring on 30 April 2023

According to research by uSwitch.com nine in ten (90%) homeowners have renovated their homes in recent years and almost six in ten (58%) of these have carried out extension work such as loft conversions, new garages or extra bathrooms.

More than half (52%) of those who have carried out the extension work have not informed their insurer, potentially leaving them with an invalid insurance policy.

The research also reveals that consumers are failing to adequately protect their homes when the work is actually being carried out.  Four in ten (43%) did not take steps to arrange extra cover for accidental damage to possessions or the increased security risk of open walls or removing doors and windows.  More worryingly, half of home improvers (49%) failed to check whether their tradesman was certified, leaving themselves open to being short-changed.

If you are extending your home, you are likely to be increasing the rebuild cost, so you will need to make sure this is updated with your insurer.  You might need to buy specialist insurance if your home has been built in an unusual way, such as if it has timber frames or another non-standard feature.  Plus, if any external windows, doors or walls are removed during building work, you will be more vulnerable to burglaries, so you also need to make sure you are covered for this.

It is also important to make sure the builders have public liability insurance to cover any accidental damage that happens during the work.  With almost half of homeowners borrowing money in order to fund their building projects, the last thing you want is to get into extra debt if something goes wrong.

In respect of your buildings insurance, there are several additional factors that could make this invalid if an extension is built.  Some examples would include:

• Failure to disclose the extension: If you do not inform your insurance company about the new extension, your policy may be invalid as your insurer may not have assessed the new risk of the extended property.
• Non-compliance with building regulations: If the extension does not comply with building regulations, it may be considered illegal and your insurance policy may be invalidated as a result.
• Use of non-standard materials: If the extension is built using non-standard or unapproved materials, your insurance policy may be invalidated as these materials may not be covered under the policy.
• Structural changes to the existing building: If the extension requires structural changes to the existing building, such as removing load-bearing walls, this could increase the risk of damage to the property, and your insurance policy may be invalidated if you have not informed your insurer or taken the necessary measures to mitigate the risk.
• Change in occupancy: If the extension is built for a different purpose than the existing building, such as a change in occupancy from residential to commercial, your insurance policy may be invalidated as it may not cover the new type of use.
• If the extension was built to extend the number of bedrooms then a bedroom based policy may become invalid if the insurer is not advised of the additional rooms.

It's important to read and understand your insurance policy before making any changes to your property, and to notify your insurer of any changes to ensure that you have adequate coverage.