Insurance for an extension or renovation of a home you own

If you are extending or renovating a house you already own, you have two insurance questions that a new build does not: what your home insurer will say about the work, and who covers the existing house while the new work is joined to it. A contract works policy is insurance for the building work itself, its materials and the builders’ equipment. It is usually taken by your builder or by you, and it is where the second question starts.

For whether to extend, renovate or rebuild, and the grants that apply, read renovate, extend or rebuild an old house.

Do you need to tell your home insurer?

Yes, as a general rule. Insurers expect to be told about changes that affect the risk, and building work is one. One large insurer asks customers to tell it if their home is undergoing building or renovation work, and whether the home will stay furnished and lived in. It warns that not reporting a change that affects your policy can lead to cancellation, the policy being treated as if it never existed, or a claim being refused.

Other insurers set their own thresholds. Some list the kinds of work they want to hear about, such as an extension, a change of use or work to the structure, and others ask about any building work. Read your policy conditions, then ask. When you tell them, say:

• what the work is and roughly what it costs;
• the start date and how long it should take;
• whether the house will be lived in, furnished or empty while it goes on;
• who is doing it: a main contractor, tradespeople you hire, or you.

Ask them to confirm in writing whether the policy continues unchanged, what changes, and whether the premium changes. If they will only answer by phone, email them a summary of what they said and ask them to confirm it. Keep the reply with your policy documents. See the CCPC’s insurance guidance for what you can expect from an insurer when you make a change.

What can the insurer change or exclude?

It depends on the policy and on the work. Examples that insurers apply, which you should ask about:

• A restriction on the buildings cover while the works are going on. One insurer, for example, reduces buildings cover temporarily only while the home is both under building work and empty, and reinstates it once the work is done and the home is lived in again. Ask whether yours does this.
• An exclusion for the work itself. A home policy is not a contract works policy. Damage to the new work, to materials and to builders’ machinery and tools is usually something else to arrange.
• Conditions on security and water. A house with scaffolding, open walls or a roof off is easier to enter and easier to flood. Ask what the insurer expects, such as locks, alarms or draining the system.
• A higher premium. A bigger house costs more to rebuild. Update your sum insured, the most the insurer will pay to rebuild the house, when the work finishes. See how the sum insured works.

Is the existing house covered by the works policy?

Work out which policy covers which part. A contract works policy, whether taken by you or your builder, is written for the new work. The policy schedule is the page of the policy that lists exactly what is insured. One published self-build wording defines “Existing Property” as any existing structure on or adjacent to the site, excluding outbuildings, ancillary buildings and boundary walls unless they are named in the schedule. Its general exclusions then leave out property that formed part of any structure before the project began, unless it is included in the schedule.

In plain terms, the contract works policy may not cover the existing house you are extending unless it is named in the schedule. Some builders’ insurers will add the existing house to their policy for an extra premium. Others expect it to stay on your home policy. Either way, there should be no gap. See the existing house and the works policy and contract works insurance.

Ask both insurers the same two questions and compare the answers:

1. A fire starts in the new work and spreads to the existing house: who pays?
2. A storm damages the existing roof while it is opened up: who pays?

If each points at the other, you have found the gap while there is still time to close it. Ask the builder’s insurer to name the existing house in the schedule, or ask a broker to arrange cover for it.

Who insures what when someone else runs the job?

The answer depends on how you are paying for the work.

Arrangement	Usually arranged by	Your questions
A main contractor takes the whole job	The contractor, for the works and their liability	Does it include the existing house? Are you named on the policy?
You hire each trade directly	You and each trade, for their own part	Does each trade hold public liability cover? Who covers the works as a whole?
You do some of the work yourself	You	Your home policy may not cover damage to your own DIY work, or damage that work causes. Ask your insurer.

If your contractor has a contract works policy, ask for a copy of the policy schedule and the certificate, not a verbal assurance. Check the limit, the dates, and whether the existing house and your belongings are included. If you are paying trades directly, insurance when you project manage lists what to ask each of them for. The project manage or hire a main contractor guide explains the choice.

What if you move out during the work?

A house that is empty is treated as a different risk. Insurers set a number of consecutive days after which the policy’s unoccupied-house conditions apply, and what is restricted afterwards differs.

• One insurer says home cover remains in place for up to 45 consecutive days of being unoccupied. After that, certain coverages are restricted or removed, including theft, deliberate damage, water or oil escape and accidental damage.
• Another says most household policies allow roughly 30 to 40 consecutive days a year, after which cover is usually cut back to fire and property owner’s liability only. It also expects a responsible person to check the property inside and outside at least once a week.

These are examples from two insurers’ published pages, not a rule. A renovation can last months, so the limit is easy to pass. Before you move out, ask your insurer:

1. How many days can the house be empty, and does building work change that?
2. Which cover is restricted after that, and is liability among them?
3. What conditions apply, such as weekly checks, draining the water system in winter or keeping the house heated?
4. Whether a house under renovation can be insured on a specific unoccupied or renovation policy, and what that costs.

If the property has been empty and is being brought back into use, the Vacant Property Refurbishment Grant guide covers the grant, and buying an unfinished house covers what to ask when a property is not yet complete. A mortgage lender will also want cover in place. See what lenders require.

What about liability for the people working there?

You can be responsible if someone is hurt on your property. The Health and Safety Authority sets out a homeowner’s role in construction, including what changes when you hire people to do the work.

• Ask every trade for a certificate of public liability insurance (it covers injury or damage to other people), and check the limit and the dates. See public liability insurance.
• Where a trade has employees, ask for employers’ liability cover (it covers the firm’s own workers). See employers’ liability insurance.
• Tell your own insurer which firms will be working on the house and over what dates. Your home policy’s liability section is there to protect you, but its conditions may change while work is going on.
• If the work touches a wall you share with a neighbour (a party wall), ask your insurer and the contractor who pays if the neighbour’s property is damaged.

What should you send a broker?

A broker can arrange one policy covering the work and the existing house, or advise how to join up separate policies. Have these ready:

• the address, the age and construction of the house, and its current insurer and policy number;
• a plain description of the work and the estimated cost;
• the start date, the expected duration and whether the house will be empty;
• who is doing the work, and whether a main contractor holds a contract works policy;
• your sum insured for the existing house, and what you think the finished house would cost to rebuild.

Ask for the answers in writing, and ask the broker which of the covers you are being offered overlap, so you are not paying twice for the same thing.

What to do next

1. Read your home policy conditions for building work, alterations and unoccupied property.
2. Write to your home insurer with the details listed under “Do you need to tell your home insurer?” and ask for their reply in writing.
3. If your builder has a contract works policy, ask for its wording and whether the existing house is listed. If nobody has one yet, ask a broker to arrange it.
4. Decide whether you will stay in the house, and ask about the unoccupied limit before you move out.
5. Ask each trade for public liability and, where relevant, employers’ liability certificates.
6. Check which covers your project needs, then take the result to a broker.