Homeowners prioritise improvements amid challenging market conditions

02/11/2023

IN the face of a sluggish property market and the ongoing financial strain of the ‘cost of living’ crisis, Scottish homeowners are choosing to enhance their existing residences rather than pursue relocation, a recent survey conducted by insurance broker Lycetts has revealed. The study found that a significant 77% of homeowners in Scotland are opting for renovations over selling their homes, reflecting a trend prevalent across the UK.

James Cuthbertson from Lycetts emphasised the financial benefits of home improvements, stating, “Home improvements can add thousands to their property’s value.” However, he also highlighted the potential risks involved if appropriate insurance coverage is not in place, underscoring the importance of securing comprehensive protection.

James Cuthbertson

Cuthbertson stressed the necessity of a Contract Works insurance policy, which provides comprehensive coverage for the owner, contractor, property, work in progress, building materials, hired-in plant equipment, liabilities, and third parties. This policy also offers optional non-negligence cover, ensuring a robust safety net during the renovation process.

For minor improvements like plumbing, homeowners might rely on standard home insurance. However, Cuthbertson advised homeowners to inform their insurers about the work’s start and completion dates to avoid claim complications. Structural works demand specialised renovation insurance, but the coverage can vary significantly. Homeowners should seek expert advice to ensure adequate protection. Contents cover may not be included, posing a significant financial risk if valuable possessions are damaged during the renovation, such as in the event of a collapsing roof or ceiling.

Cuthbertson also dispelled a common misconception concerning a contractor’s liability insurance. He clarified that a contractor’s liability insurance might not suffice in all scenarios, emphasising the need for homeowners to review and update their buildings insurance to cover renovation works adequately. Specialised renovation works policies often include coverage if the contractor faces financial issues or leaves the job unfinished. However, homeowners need to be vigilant about unoccupancy conditions, especially in cases where a half-renovated home might become uninhabitable.

In light of these complexities, Cuthbertson emphasised the importance of consulting with insurance advisers right from the outset. Making the decision to renovate and stay in one’s existing home may seem straightforward, but as highlighted, it involves intricate processes and potential risks that necessitate expert guidance to ensure homeowners are adequately protected throughout their renovation journey.

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