Written by Ben Rickard from Builtin New Zealand Limited.
There’s a lot to think about when you’re renovating your home. It’s an exciting time, but there are risks to be considered and also insurance essentials to get right. A building project that goes pear-shaped can be one of the most stressful and costly experiences of your life.
In some cases homeowners may have a responsibility for ensuring a safe working environment. Failure to do so could breach health & safety laws, resulting in fines and also possible prosecution. Contact WorkSafe for more information on your responsibilities.
Managing the project yourself? This includes buying the materials, hiring the tradies and also coordinating the build schedule. Oh, and you’ll be responsible for arranging the insurance.
This includes contract works insurance (sometimes called construction or builders risk insurance). This covers the building work for things like accidental damage, subsidence, theft, fire and storm damage as well as natural disasters. Get in touch with your insurance company early on to sort this out. If you have trouble you canalso request cover from Builtin Insurance instead.
Even if you’ve engaged a builder to run the whole job, because the work is being performed to an existing structure it’s generally the homeowner who is responsible for insuring the project.
You also need to consider your liability if neighbouring property (such as driveways, fences and even underground services) are damaged during the work. If you’re project managing the job and no-one owns up to having caused the damage, you could be held liable for the cost of fixing it. Public liability insurance is designed for these situations.
Because of the amount of money at stake, choosing the right builder is one of the most important decisions that will lead to a successful renovation. Check references, use a written contract and agree a payment schedule. This schedule should limit advance payments as much as possible. Most importantly, ask what guarantees they can provide you.
One of the best defences against the risk of the project turning to custard is to have an independently-insured builders guarantee in place.
• Refunding your deposit if work hasn’t started
• Completing your project at the price you agreed
• Fixing defects for 10 years after completion
They also add value to your home. If/when you decide to sell, buyers will be assured about potential (but unknown) problems with the work that may arise later.
Is designed for work under $30,000 and is available from Builtin Accredited tradespeople on Builderscrack. For larger projects, ask your builder to provide a Homefirst Builders Guarantee.
Renovating your home is immensely rewarding. If a problem arises it can quickly turn into a nightmare. A small upfront investment in the right insurance, including an independently-insured builders guarantee, will limit your risks. This allows you to enjoy both the renovation process and the end product.
Written by Ben Rickard from Builtin New Zealand Limited. Builtin are New Zealand’s foremost construction insurance & guarantee experts. Builtin’s guarantees are underwritten by CBL Insurance Limited, a Reserve Bank licensed New Zealand insurer with an A-(Excellent) financial strength rating and more than 5 million homes under guarantee worldwide.