Renovating your home? Why your insurance may need updating too
If you’ve recently updated your home, it can be a good idea to update your home insurance too. Renovations often mean it will cost more to repair or rebuild your home, which could leave you out of pocket if you were to make a claim.
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A sparkling new kitchen and bathroom, or a backyard extension can make your home something to be proud of. It can also affect the cost of repairing or rebuilding your home if it’s damaged by an event you’ve insured for.
Renovations can increase the value of your home, so it’s worth checking the buildings sum insured amount in your home insurance policy before and after you renovate.
What does sum insured mean?
Your sum insured is the amount your home is insured for. For home insurance, it should be based on what it could cost to repair or rebuild your home, not what you paid for it or what it could sell for.
It usually doesn’t include the value of the land because you’d still own the land after a major loss.
Related article: What is sum insured?
Renovations can increase the cost to rebuild. For example, a new bathroom, kitchen, deck, garage, studio, pool or extra room may add value to your home and could affect your building sum insured.
If your home insurance policy still reflects the pre-renovation buildings sum insured amount, you could be underinsured.
Why should I tell my insurer about renovations?
It’s a good idea to contact your insurer before work starts.
Renovation work can change your property risk, especially if there are structural changes, temporary openings, scaffolding, tradespeople onsite or changes to how you use the home during the build.
Your insurer can let you know if the work affects your cover, whether you need to update your policy, and what information they might need from you.
Do I need to update insurance after renovating?
Once the work is finished, review your home insurance policy details. Focus on whether your building sum insured still reflects the cost to rebuild your home, including the renovation.
Think about what has changed. Have you:
- Added a room?
- Renovated a kitchen or bathroom?
- Added a deck, garage, studio, pool or other outdoor structure?
- Upgraded fixtures, fittings or finishes?
- Changed the layout of your home?
- Used higher-quality materials?
These updates may all affect rebuilding costs.
Related article: 5 tips to review home insurance
What if my renovation isn’t included in my home insurance?
If your buildings sum insured is too low, it may not be enough to repair or rebuild your home after a major claim.
That could mean paying the difference yourself, changing your rebuild plans, or making tough decisions at an already stressful time.
The good news is, reviewing your cover doesn’t have to be complicated. Start by checking your current policy, reviewing your buildings sum insured and speaking with your insurer if you’re not sure.
Building insurance estimate calculator
Should I update my contents after a renovation?
During a renovation, you’re likely to add some attractive new furniture. So, if your renovation includes new appliances, fixtures, furniture or higher-value items, it may also be worth reviewing your contents cover.
Bottom line
Renovations can make your house feel more like home. They could also change what it costs to rebuild. Checking your home insurance before and after renovating can help you feel more confident your cover still suits your home, needs and budget.
At the heart of it, home insurance is about helping protect the place you call home – including the improvements to make it yours.
