We all know we can make big profits when renovating! But did you know it may not always be smooth sailing? There are higher rents and strong capital gains for renovators but aside from over-capitalising and going beyond the budget, there are some insurance risks, too!

Insurance risks when renovating your property


You might assume your property cover is adequate throughout the renovation period but it’s important that you understand which ones are covered and which ones aren’t in the event of any mishap! Often, you would need home and contents cover and cover taken out by your builder. If you’re the renovator yourself, you might even need to take out a builders’ cover yourself.

Don’t forget to inform your insurer that you’re renovating. If you don’t, some policies may be void, so if something goes wrong, you can’t make a claim as many policies require you to tell them of any changes you’re making.

If you’re planning to move out while renovating, make sure your policy won’t lapse if it is vacated for longer than a specific period.

Most home and contents policies do not cover claims over a certain amount during renovations as these may already be categorised as building sites. Over this amount, your legal liability cover against injury claims may also be compromised.

Property values


Often, property values bump up by a significant sum after a home renovation. Remember to revise your home and contents cover to make sure it reflects the new value of your home and avoid being out of pocket in case of under-insurance.

As mentioned above, most policies also don’t cover homeowners doing the renovations themselves. If you’re a DIY renovator, check with your insurer to see if you would need builders’ insurance aside from your home and contents cover.

Make sure your builder is insured and that their policy is up to date as well. You are not covered against defective or incomplete work if your builder has not insured your project. It’s typically compulsory for builders to have builders’ insurance if the residential work is over a certain value. This will protect you if the builder doesn’t complete their work or the renovations turn out to be defective.

Most of the time, property owners are not covered if the project is abandoned after a certain period. Even a builders’ insurance policy might not accept claims for any damage from abandonment as well, so avoid this as it may leave you in a sticky situation!

Accounting Firm Wellington


Have a chat with your insurance provider to know all your options! Take action and grab those property development opportunities that present themselves as the market moves on. Give us a bell if you would need a hand with all these! We’re always keen to have a good property development chat with our clients!

Chat soon,

Your Outside Team 




Need a bit of assistance with your business? Contact an Outside Accounting team member today and learn more about our fixed fees. You won’t regret it.

Aside from business consultation, we are business accountants Wellington who offer accountingbookkeepingpayroll services designed to help you achieve greater financial success.

You can click here to speak to a businessaccounting and bookkeeping firm. We will give you a call to know more about your needs. We will explain to you how we can improve your business.



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