It's a very good question!
The answer?
It definitely requires a little more investigating versus Owner Builder insurance for a straight new build.
Why?
Because it comes down to how good your existing home insurance policy is!
Let's get into the nitty gritty and specifically, the two key points you need to understand.
Exclusion
99% of people have a home insurance policy that has exclusions against any loss or damage to the existing house IF it arises from construction work.
It's a very important point that you’ll absolutely need to clarify with your home Insurer.
But exclusion is pretty straightforward. Just make sure an insurance quote includes optional cover for the existing structures for damage directly arising from the owner build project.
Invalidation
In some cases the project could be of a type, value or scope that actually completely invalidates your home insurance policy.
The second, invalidation, you may need to upgrade the level of cover on an existing structure to fully comprehensive in order to cover the owner build for unrelated events like a storm and/or bush fire.
Next steps
So when doing a renovation/extension as an Owner Builder, here’s the first thing you NEED to do in order to determine what insurance your require:
Contact your existing home insurance policy provider and ask:
- Here’s what I’m doing, this is the value of what I’m doing, will you cover me if this damages my house?
- Will my existing policy continue?
- Do you offer Owner Builder Insurance?
- If yes, do I need to upgrade my level of cover for an unrelated event like a storm or bushfire?
Be absolutely certain that you understand your position. Take notes during the call, even ask for the response in writing.
Once you have the required information, you’ll be able to make a more informed decision.
IMPORTANT TO NOTE:
A home insurance policy, along with every other insurance policy in Australia, has what’s called a Duty of Disclosure. If your risks change, e.g. doing a renovation, you have to let your Insurer know!
Click here for a whole lotta info about owner builder insurance.
