Higher valued homes – Improvements can be costly

The number of houses being purchased where the value exceeds £1 million pounds is very much on the increase, with home improvements becoming more and more popular. Owners of higher valued homes are more likely to consider works whether following a new purchase or to an existing property and consequently planning applications have seen a paralleled increase.

The works can range from a simple matter of redecoration, with the owner occupying the property to a complete renovation, taking several months to complete where the property is unoccupied. Either way millions of pounds are being spent each year, making home improvement a big business.

A small amount of work is usually acceptable to insurance companies without any restrictions in cover, generally any works costing up to £50,000, although this will depend on the individual insurance company. The building works increase the risk to the home insurer and these risks can be complex with insurers paying claims caused by contractors on a regular basis. In many cases the insurer is not aware of the on-going works and the additional risk that inevitably these works bring.  Where there are contracts for works in excess of £50,000 and the insurer in unaware, generally there will be no cover in force for the buildings. This leaves the policyholder exposed and in the event of an incident, potentially a considerable amount of money out of pocket.

Many works will be subject to JCT (Joint Contracts Tribunal Ltd) clauses or contracts – see www.jctltd.co.uk for more information. Each contract will have a section on insurance and these can be complex and have implications for the existing structure, your home.

Before any works are started and as early in the process of any planning application or tenders as possible, you must notify your insurance company or broker so that additional and appropriate cover can be arranged for the period of the works. It is not possible to arrange the appropriate cover once the works have started so it is imperative that if you are thinking of improving your home that you seek advice.

For further information about how home improvements can affect your household insurance, please contact Carl Sharp 0n 0118 9165487 or complete one of our enquiry forms.

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Author: Jeremy Edwards | January 4th, 2012

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