Is Owner Builder Insurance a grudge purchase? – Part 2
Following on from Part 1, outlined below are more questions you need to be comfortable with prior to purchasing a policy.
If you are renovating…
Thinking your Home and Contents insurer will cover you when renovating. Most home and contents policies limit or exclude cover when a homeowner undertakes a renovation. In all circumstances you must check with your home and contents insurer BEFORE you start any works! In most cases if you undertake a larger renovation over $50 000, then the existing house will not be covered. It is highly advisable to cover your existing property when insuring your renovation or extension, in the event of a claim – let the insurers have the hassle.
Do you want your contents covered? Very difficult to find cover, as your home is now a building site and open. Contact Buildsafe to explain how we can help.
Using a builder to lock up & forgetting insurance While the builder should have construction and public liability insurance in place, there will be no insurance once the project is at lock up stage. Research before the project begins to which insurers will take on the project once you take over at lock up stage.
Buying a builder’s policy and paying for stuff you cannot claim on. Most policies on the market are for registered builders, and the insurer does not want to make the policy owner builder specific because of the cost. Therefore, they include blasting or explosives, maintenance, underground works etc…which you are being charged for but cannot claim on. Always read the PDS before buying the insurance.
Under Insurance – Where you save a small amount and cost yourself a fortune.
‘For example, if Your sum Insured is only 50% of the value of the property required to be insured at the time that the Insured Damage occurs, We will only cover a proportional amount of Your loss, as set out below:
Full insurable value $100,000 Sum Insured $50,000
(i.e. 50% of the full insurable value)
Amount of Your loss $75,000 Amount We will pay $37,500
(i.e. 50% of the loss) less any excess
This means You will be responsible for 50% of the loss You suffer (as well as any applicable excess) because Your Sum
Insured was only 50% of the value of Your property required to be insured.’
Not protecting the owner builder – off site. If you are picking up materials for the project, most policies will not cover you, the owner builder, if you drop them on someone causing injury or property damage. Check.
These reports are brought to you by Buildsafe, the owner builders’ insurer for over 30 years. Owner Builder insurance is one thing that you need to have the best cover to protect your family.
*Flood definition to be used when checking cover – not just any riverine flood but any water escaping from lake, river, creek, natural watercourse (even old creeks that may be a road, gutter or reserve now), canal dam reservoir.