In a stunning location, in Europe’s most southerly fjord, Kotor, Montenegro is a perfectly preserved Venetian gem.

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Carrying out major home renovations can boost the value of your property, but it’s sensible to buy renovation insurance to ensure you are protected against the risks involved and don’t end up paying the price if something goes wrong. Here’s what you need to know.

What is renovation insurance?

Renovation insurance is a type of insurance policy that is specifically designed to cover all the additional risks associated with home renovations. It will provide protection against damage to structures being built, and provide cover against injury for those carrying out the renovations.

image credit: Future PLC

How does it differ from a standard insurance policy?

A standard home insurance policy won’t usually cover you for these additional risks or it will have specified limits in place. This means it won’t be appropriate if you’re planning extensive home renovations such as a loft conversion or any structural alterations.

What should a renovation insurance policy cover?

The cover provided will vary depending on the policy, but typically you should be covered for:

• Damage to the new building and existing structure as a result of fire or flooding
• Theft of building materials, tools and equipment kept at the property
• Theft or damage of your personal possessions
• Damage to neighbouring properties caused by your renovations
• Protection for your property if it’s left unoccupied
• Public liability cover in the event someone is injured at your property while renovations are completed
• Employers’ liability cover to protect you against claims made by anyone working on the site in the event of injury or death
• Damage caused by subsidence, heave or landslip during the works

Do I have to take out renovation insurance?

Before starting any type of home renovation work, it is important to make sure you have adequate insurance in place to protect you if someone gets injured or your home is damaged during the renovations.

For fairly minor home improvements, such as the installation of a new kitchen, it’s worth contacting your current insurer to double check whether your standard home insurance policy already provides sufficient cover. It’s best practice to inform your insurer of any work being carried out on your home anyway.

But for more substantial home renovations you will need to take out a separate renovation insurance policy; an insurance for building works.

‘You’re not legally obliged to have renovation insurance, but if your home insurance policy is restricted during your project, you may have an exclusion that applies when damage is caused by the works, or your existing policy may actually be invalidated by structural works,’ says Brooke Crisp from Renovation Plan.

‘In this case, you will be relying on your contractor’s public liability policy to cover any potential loss. This could cause problems as it would only provide cover in the event of the contractor being negligent. The contractor would also not be providing cover for any existing structure which is there at the moment (i.e. your existing home itself).’

How much does renovation insurance cost?

Image credit: Future PLC/ Colin Poole

The cost of renovation insurance will depend on a range of factors, including the expected length of the project, the estimated costs, the scope of the work being carried out, as well as the rebuild cost of the current property.

‘When purchasing renovation insurance, it is important to engage with your insurer as early as possible, providing them with as much detail as you can,’ says James Vaughan, development underwriter at specialist insurer Hiscox.

‘Some insurers have a preference of 30 days’ advanced notice of the project starting. Due to the complexity of building works, insurance quotes can often take longer to produce compared to a standard home insurance policy.’

How to compare renovation insurance

When comparing renovation insurance quotes, it’s important not to simply pick the cheapest one you find. Instead, make sure you check exactly what’s included in the policy and whether there are any exclusions.

‘Customers should be clear about what is going to be involved in the renovation such as timeframes, materials used and whether the home can be occupied whilst all the works are being completed,’ says Sarah Smith, head of home underwriting at LV= General Insurance. ‘

‘They should also understand any special terms, limits and conditions that will apply whilst the renovation is underway. This will allow the customer to check the cover meets their needs before purchasing.’

Where can I buy renovation insurance?

You can buy renovation insurance from a specialist insurer or broker online, such as:

• Hiscox
• Home Protect
• A Plan
• Renovation Plan

Do I need to change policies when the project is complete?

Some renovation insurance policies will provide continuous cover once the work is complete. But if not, you will need to revert to a standard buildings and home contents insurance policy, checking that you have the correct level of cover.

‘Renovations could add value to a property as well as the value of household contents,’ says Vaughan. ‘It is important to update the policy to ensure that the right insurance cover is in place.’

The post Renovation insurance – when do you need it? appeared first on Ideal Home.

Featuring one of the standout prints of the year, the gingham cushion from John Lewis & Partners’ ANYDAY range, sold out in record time when it launched earlier in the year. And with a price tag of just £15 it’s easy to see why.

Now back in stock and ready to be snapped up in a jiffy, the cushion sporting one of the biggest home decor trends is available in three pared-back shades. The plaster pink colourway is giving us all the summer feels, while the blue option has a certain ‘Je ne sais quoi’ about it. The third colourway is a beautiful natural shade, perfect for those who prefer a more neutral feel in their homes.

John Lewis gingham cushion

Image credit: John Lewis & Partners

But it’s not just its inexpensive price that has made the gingham cushion from John Lewis & Partners’ ANYDAY range such a hit with a plethora of social media influencers and homeowners across the country. Featuring a pretty gingham print, as well as frilled edging too, it ticks off not just one, but two huge trends for this summer.

However big trends don’t usually come cheap.

Image credit: Projektityyny

At £68, this Wes gingham frill cushion from Projektityyny, has a more delicate frill to it and a slightly smaller print. Made from 100% linen it might be a more luxury offering, but costing over £50 more than the John Lewis dupe, it’s more of an investment piece than a payday pick-me-up.

John Lewis’s ANYDAY range has been a huge hit since it launched last year, bringing ‘quality you’d expect at prices you wouldn’t’. And offering such an on-trend homeware piece for such a low price, is a great example of how small changes, can have a big impact in your home.

Image credit: John Lewis & Partners

Layered up on a bed, or scattered as sofa cushions, the gingham goddess will elevate your home decor all year round, offering both bedroom ideas and living room ideas. Machine washable, any spills or stains from a box-set binge, or water-marks from an afternoon nap, can easily be removed.

Image credit: John Lewis & Partners

But don’t leave it too late to grab yours, as sales are already said to be soaring and it won’t be long until this bestselling is sold out once again!

The post This bestselling designer-dupe cushion from John Lewis will save you over £50 appeared first on Ideal Home.

Do you dream of turning a rundown or derelict property into a home? You may need to take out a specialist renovation mortgage to fund such a project, unless you have a large lump sum to pay for the work.

You may have found an empty property in an amazing location with panoramic views that you want to restore. Or you might come across an uninhabitable property that you want to breathe life into. Whatever your property renovation project, you may need a specialist mortgage to meet the cost.

What is a renovation mortgage?

Image credit: Future PLC/Bridget Peirson

Most high street lenders only offer mortgages on properties that are considered habitable. So, if you’re buying a property not currently fit to live in, you’ll need to find a renovation mortgage from a specialist lender. The loan will finance the purchase of a property that’s derelict, in need of conversion, or uninhabitable because it’s without a working kitchen or bathroom.

Standard repayment or interest-only mortgages aren’t suitable for extensive renovations.

Chris Sykes, of the mortgage broker Private Finance, says: ‘If it is a large renovation then normal mortgages are not suitable as lenders are taking on risk they are not pricing for in this case, and you could run out of money and leave a property in a worst state than it was when bought, affecting the lender’s security and the property’s saleability.’

The important feature of a renovation mortgage is that it enables you to borrow the money you need for the work. You’ll receive the money in tranches rather than all upfront.

How does a renovation mortgage work?

Image credit: Future PLC/Simon Whitmore

With a renovation mortgage, you may be able to borrow up to 90% of the property’s value as it stands, depending on your income and circumstances. You should fund the remainder of the purchase from savings, other assets, or borrowing. The lender usually withholds a chunk of the money, and releases it in stages as the property is renovated. This is similar to a self build mortgage.

On completion of specific stages, and inspection by the lender’s surveyor, you could receive more money. Adrian Anderson, director of property finance specialists Anderson Harris, says: ‘The bank will want an element of control over when and how the money is released to pay for the works to ensure the money is used correctly. The money is usually released against the architect’s certificates/confirmation that different stages of the development have been completed or when the next stages are about to start.’

Bear in mind that the cost of restoring a building will rapidly add up. You need some savings, or other forms of finance such as personal loans, to pay for work between ‘stage payments’.

When taking on a project of this nature, you should also take out a specialist renovation insurance policy to protect your investment.

Will it cost more than a standard repayment mortgage?

Yes. A renovation mortgage rate will typically be one or two percentage points higher than a standard mortgage. This is because the risk to lenders is greater. There’s no guarantee that the work will be finished. The lender could be forced to repossess the property to recoup their debt.

It also depends on how much you borrow. Anderson says: ‘Due to the works going on at the property there will be development risks associated and therefore the banks factor this in with their upfront fees and the rate charged during the development period. These types of mortgages usually take the bank more time to administer at time of application as it has to carry out due diligence on the works taking place. These include checking planning permission is in place, checking the costings/timescales look realistic and carrying out due diligence on the contractor.’

What kind of properties qualify for a renovation mortgage?

Image credit: Future PLC/Tom Meadows

You can get a renovation mortgage on a vast range of “fixer-upper” properties. This covers properties from a listed building that’s fallen into disrepair to a timber shell without a roof. However, the range of mortgages you have to choose from will be far greater if the property to be renovated is habitable. That means it comes with a working kitchen and bathroom.

Where can I get this type of mortgage?

There is a limited number of lenders offering finance for complete renovations. Try lenders offering self build mortgages as a starting point. For example Ecology Building Society specialises in lending on energy efficient properties. Smaller building societies are often a good place to try.

Speak to a mortgage broker to find out about your options. This is a specialist area of the mortgage market and the solution may need to be imaginative. Working with someone independent who knows the market well is a good move.

Can a first-time buyer get a renovation mortgage?

Yes, in theory first-time buyers can get a renovation mortgage, and doing up a rundown property may appeal as a way to get onto the property ladder. However, they’ll need a deposit of around 20-25% of the purchase price, which could be a struggle to stump up unless they have enough saved.

What happens when the renovation is complete?

Once the renovation is complete, you ideally take out a mainstream mortgage on the property.

‘Usually at this stage of the process you can refinance based on the open market value of a property and take a more normal mortgage, and hopefully at a low LTV as this is when the gains you have made are realised,’ says Sykes.

The post Renovation mortgages: how do they work? appeared first on Ideal Home.