Renovation Insurance

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Are renovations covered by home insurance?

What type of insurance do I need for renovations?

What’s typically excluded from renovation insurance?

Am I covered for any damage caused by a builder or contractor?

Does renovation insurance cover my DIY projects?

Who might need renovation insurance?

Do I need to modify the sum my property is insured for after the renovation?

How can I find renovation insurance for my property?

How can I compare home insurance?

Long story short

Standard home insurance policies have their limits

They often cover legal liability for injuries or property damage during renos, but not the actual works or accidents caused by them.

Got a DIY itch? Check your policy first

Some home insurance policies exclude loss or damage caused by DIY changes to your property’s structure.

Update your cover after the project’s done

Finished renos can boost your home’s value. It’s a good idea to revisit your cover to avoid underinsurance.

Are renovations covered by home insurance?

Before you start restoring your Victorian-era floorboards, there’s one thing you might like to know – your reno plans can stir up some serious risks, and your current home insurance might not be up to the task.  

Standard home insurance generally doesn’t protect you from actual construction works, which is a bit of a bummer for homeowners and landlords. Instead, building insurance typically covers legal liability for when people get injured (or worse, pass away) at the insured address. It can also cover loss or damage from an accident at your property. Policies typically cap their legal liability coverage, and the limit varies depending on the provider.  

Some insurers might offer add-ons that cover the entire renovation project while it’s underway. 

Building materials, fixtures, and fittings that haven’t been installed yet might also be covered by some policies – but only if they’re safely locked up at your insured address.  

You can also protect prized possessions that you put into commercial storage during renovations. This can come as an optional cover to extend your contents insurance cover. 

The key thing to remember is there’s no one-size-fits-all when it comes to reno insurance. Each insurer does it differently, so it’s worth giving yours a hoy to check your coverage. 

What type of insurance do I need for renovations?

There are various types of insurance that provide different kinds of cover. 

Building insurance

Building insurance insures the structure of your entire property – including outbuildings like the garage, fittings like the shower, and fixtures like the oven. It protects you against terrible events like fire, vandalism, and natural disasters. This type of home insurance can cover your legal liability (up to a certain amount) if someone gets hurt or your neighbour’s property gets damaged due to an accident at your renovation site. 

Note, however, that many building insurance policies won’t cover for any loss or damage relating to the actual building works, so it’s a good idea to check your policy. 

Contents insurance

This type of home insurance can cover your belongings from loss or damage at your property. Just like building insurance, contents insurance can cover your legal liability (up to a certain dollar figure) at your home during renos. 

Again, standard contents insurance doesn’t typically cover you for loss or damage due to the actual renovation works, so – say it with me – it’s worth checking with your insurer. 

Combined home and contents insurance

Combined home and contents insurance can provide legal liability coverage when revamping your property – but only up to the limit specified by the policy. 

Landlord insurance

If you have a rental property, landlord insurance can give you the same cover for legal liability as previously described. This type of home insurance can give you peace of mind when doing up your investment property — you can feel at ease knowing you’re covered if your tenants (or their guests) unfortunately get hurt during the works. 

Specialised cover and optional add-ons

If your standard home insurance doesn’t cover actual construction work, some insurers might have a separate option just for the period you’re doing the reno. 

Specialised insurance policies for owner-builders are also available and typically cover insured events like fire, storm, and theft during the actual building work. Some even provide state-mandatory insurance policies, like home building compensation insurance in New South Wales.¹For more information, see NSW State Insurance Regulatory Authority – Home building compensation

What’s typically excluded from renovation insurance?

Even the most comprehensive home insurance has a few things it won’t cover. Here are some of the general ones:

• reno-related loss or damage due to insured events, say rain entering your house because you’re replacing your spare room’s windows
• legal liability that costs more than the limit specified by your insurer
• general exclusions that apply to your standard home insurance policy, like renovations due to asbestos-related issues
• altering the structure of your home — taking off the roof, removing stumps, knocking down walls, and other structural changes. 

Some insurers might also void your claim if you fail to give notice before starting the renos. 

Am I covered for any damage caused by a builder or contractor?

Your builder should have their own insurance (public liability, contract works, workers compensation, etc.), but those usually protect them. If a contractor causes damage, their insurance kicks in first.

If the builder’s insurance is inadequate or their insurer disputes the claim, you might find yourself in a hairy situation. So it’s worth getting home insurance to cover your legal liability – and perhaps a separate specialised policy to cover your renos.  

Helpful tip

If you’re planning to hire builders and independent contractors, confirming that they have their own insurance is a pro move. It’s worth asking every contractor for certificates of insurance before work starts, then confirming those policies are current and aligned with your renovation. For example, you might consider requesting certificates for public liability and workers’ comp before they start.  

Doing some due diligence means your renovation project won’t lie in shambles if something goes wrong. 

Adrian Bennett

General Manager for General Insurance

Does renovation insurance cover my DIY projects?

Some insurers can cover DIY projects, as long as the renos don’t require any structural changes.  

If an accident unfortunately happens while you replace your bathroom tiles or paint the nursery, then your legal liability can still be covered. But if someone hurts their leg because your partner tried to replace the floorboards (he couldn’t wait for the tradie), then you might have to check with your insurer. 

Who might need renovation insurance?

Renovation insurance can give homeowners, landlords, and property investors some peace of mind as they give their home a facelift.

Homeowners

Turning an office into a nursery with fresh paint and additional wall shelves

Landlords

Updating kitchens, bathrooms, or even cosmetic overhauls between tenants 

Property investors

Upgrading a fixer-upper as part of house flipping or multi-unit conversions

Do I need to modify the sum my property is insured for after the renovation?

Once your project’s done and the contractors are gone, it’s worth revisiting your home insurance cover. Your property may have appreciated in value, so it’s time to review and possibly increase your sum insured. You’ll want your cover to reflect the true replacement cost – including those brand-new features you just paid for. 

It’s a good idea to have a chat with your insurer. You might want to update the property valuation and provide details of any upgrades. 

Thinking your old policy is ‘good enough’ might drop you right into underinsurance territory, and that’s a risky spot if something goes terribly wrong after the renos. 

How can I find renovation insurance for my property?

If there’s one thing you can take away from this article, it’s this: Talk to your insurer if renovation – big or small – is in the cards. That’s because every insurer has their own view on renovations and failing to give them a heads up could potentially void your claim.  

To help you find the right cover for your upcoming home improvement project, here are some things to keep in mind:

How can I compare home insurance?

Home insurance isn’t about being a worrywart or expecting the worst. It’s about covering all the effort, cash, and time you’ve poured into your place, just in case something unexpected throws a spanner in the reno works.  

You can explore policies with us using the iSelect comparison tool.