We did a Q&A with Mark Adams at Allrisk Insurance (now Coverforce Allrisk) and let's just say we learnt a great deal. Mark shared many, many things but the thing that struck us most is when he said this –
“If you asked a Registered Builder about having insurance, they'd say it's crazy to not have it. You have to remember that as an Owner Builder you're taking on the responsibilities of a builder and that includes the risks”.
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Public Liability and Full Material Cover is one policy (two separate sections). One section is called Contract Works (Material Cover) and the other is Public Liability or Legal Liability (terms are interchangeable).
Public Liability is the most important Owner Builder insurance for an Owner Builder and is often required by Councils.
Material Cover is what covers you in the event of a fire, storm, earthquake, malicious damage, or theft of building materials and maybe required if you’re borrowing money for the project (banks like to know you’ve got material cover).
With Owner Builder Insurance, Workers Compensation is only recommended in some states and only for some Owner Builders.
The Workers Comp exposure Owner Builders generally come up against is when dealing with Sole Traders.
This Q&A goes into great depth about Workers Compensation – it's worth the read 🙂
This type of policy covers the scenario when an Owner Builder has friends or family doing unpaid work on the building site – therefore they're classed as volunteers.
Home Warranty Insurance is NOT required during an owner build project.
It’s only when an Owner Builder comes to sell their house that Home Warranty Insurance is required.
AND. Home Warranty Insurance rules differ by state so if you do end up selling your owner built home, it's best to check with an Owner Builder Insurance provider.
Don't fall into the trap of thinking you're automatically covered under your existing home insurance policy because most home insurance policies have exclusions against any loss or damage to the existing house if it arises from construction work.
Pretty much every insurance policy in Australia has what’s called a Duty of Disclosure where if your risks have changed substantially you have to let your Insurer know.
So when it comes to doing an extension or renovation you HAVE to contact your home insurer and tell them this – this is what I’m doing, here’s the value of what I’m doing, will you cover me if this damages my house (existing structure)? And, will my policy even continue?
Be super careful with this one Owner Builders as some Insurance companies do not extend Owner Builder Insurance.
Owner Builder Insurance Policies are generally taken out for 6 or 12 months and therefore expire at the end of the selected time period.
However. Some (not all) Insurers will extend policies for a given time.
Some (not all) Insurers will extend policies for a given time.
You have to make sure whoever you go with is able to extend in the instance that your project is not completed in the insured timeframe.