When you renovate your home, or plan to build a new one, it is crucial that you speak to your insurance broker. Home insurance policies are not intended to cover your residence while it is being renovated or built. If you are renovating or building without your insurer’s knowledge your residence may not be covered and in the event of an incident, such as a fire, your insurer may decline the claim. This is simply because the insurer has agreed to insure a residence but not a construction project.
To properly cover you, your insurer will need to either adjust your existing policy or you may require an entirely new policy to insure the risk while under construction. Homes under construction pose a significantly higher risk of loss due to the materials and activities inherent in construction, and certain perils such as fire, theft of building materials, vandalism, and water losses occur much more frequently in homes that are being worked on.
While home builders and General Contractors will carry their own insurance, it is rare that they will cover physical damage to the home itself unless it is specifically indicated in the building contract. If you do not have coverage on the home during construction, you might be forced to try to obtain compensation for damages through the legal system and this is invariably a lengthy, costly, and incomplete route to obtain restitution from your builder.