Make Sure Your Insurance Is Up To Date When Renovating

Whether it’s turning your kitchen into a space worthy of Gordon Ramsay or extending your patio or bathroom, as a homeowner, there are few things more exciting than a newly renovated home.

According to Robyn Farrell, managing director of 1st for Women Insurance Brokers, “Research indicates that South Africans are renovating their homes now more than ever, perhaps as a reaction to tougher economic circumstances and the accompanying financial strain of buying a new home.”

That said, Farrell notes that what often gets forgotten during renovations is the need to update your insurance policy once the refurbishment is complete.

“Before you start wiping away the building dust, phone your insurer to make sure you are adequately covered,” advises Farrell. “Not keeping your insurer aware of the changes to your home, and your newly acquired possessions, could result in your home being under-insured.”

Farrell says that it is also important to be properly insured during the renovation phase, too. This includes being covered for accidental damages to the pre-existing structure; theft of building materials, fittings or equipment and damage to, or theft of, household contents.

“The value of your home generally increases after renovations. It is, therefore, important to make sure that your buildings insurance premium is calculated on what it would cost to rebuild the home to the same standard, if it were destroyed. Do not simply insure it based on what you paid when purchasing the property,” says Farrell.

With regards to your home contents, following the renovation, it’s important to do a comprehensive check to make sure that you are insured for any new items you may have acquired during the build.

“An easy way to determine this is to imagine taking the roof off your home and turning it upside down, everything that falls out of your house constitutes your home contents. You would then have to consider what it would cost to replace all these items at today’s values and that is how much you should insure your new home contents for,” says Farrell.

While you are at it, it’s advisable to draft an inventory list. On this list you should write down the possessions you need to insure. Compile the list by going through the house, room by room, and writing down what is in that room.

“It’s wise to update your household inventory every six months to ensure that you keep track of new or discarded items. Keeping track of all of your possessions is difficult at the best of times, you can easily forget that you bought a few new CDs, or replaced the microwave with a better model. After a traumatic experience such as a burglary or fire, for example, it becomes especially difficult to remember those sorts of details,” says Farrell.

Farrell concludes, “Creating a detailed household inventory is not much use if you can’t find it, or if it gets destroyed in your home along with your possessions. Rather, keep a copy at home, but make sure that you also have a copy somewhere else, such as at your office or even in the bank in a safe-deposit box. Don’t forget to also keep the photographs of your goods with your inventory list.”