Extensions are putting home improvers at risk
A third of home improvers could have invalidated their home insurance, according to a survey by uSwitch.
While nearly six in 10 homeowners have extended their homes over the past five years, half of them did not notify their insurer. And just 17% informed their insurer before work began.
This matters because of the knock-on effect extending your home has on buildings insurance.
When you undertake extensive work on your home, you're likely to be increasing the rebuild cost. So should the worst happen while your insurance is invalid, you might have to foot the rebuild cost yourself.
The issue is particularly relevant given the recovery taking hold in the housing market at present - thanks to the effect of the Funding for Lending and Help to Buy schemes - which is tempting more homeowners to sell up.
Because buildings insurance is a requirement of any mortgage agreement, those with invalid insurance could see their sales fall through.
It's not just building insurance that is affected by significant home improvement, as Michael Ossei, personal finance expert at uSwitch.com, points out: "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."
He also stressed to homeowners the importance of ensuring their builders have public liability insurance to cover any accidental damage that happens during the work.
uSwitch's research also showed 43% of home improvers 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.
Meanwhile, with less than half not checking whether their tradesman was certified and 71% paying contractors in cash, home improvers are leaving themselves vulnerable to cowboy builders.
Ossei added: "It's absolutely vital to get in touch with your insurer before you start on any home improvement project to see how it will affect your policy. With almost half of homeowners borrowing money in order to fund their building project, the last thing you want is to get into extra debt if something goes wrong."
This type of insurance covers the structure and fabric of your property – the bricks and mortar, not the contents (for which you need contents or home insurance). If you have a mortgage, the lender will insist you have a suitable buildings insurance policy in place. Many lenders offer their own building insurance policies, but you don’t have to buy it from your own lender but you have the option of shopping around. The insurance covers you for the rebuilding costs, not the market value of the property.