Renovation/extension insurance cover required?

[lookseehear]

Hi all, we're hoping to start works in the next couple of weeks on a significant extension/renovation project. We don't have all the details of the renovation nailed down yet, so we're going to start on the extension and work out the rest of it as we go along, and are working with an experienced architect on this.

 

The builder we are working with is one that our architect has worked with several times, but doesn't operate with a contract to cover the build. He'll invoice us a daily rate each week to cover his time, and we will pay for materials directly, so no markup required. It means that we don't know how much it's going to cost us up-front but we're comfortable with the risk.

 

I called our current home insurance provider (homeprotect) and they said they need and exact contract value, which we don't have. What type of cover should we be looking at here? I'm waiting for the builder to send over details of his cover in the meantime. Are there any recommended providers for us to go with? We're estimating £300k as the total value of works, which will be split between builder, materials provider and other contractors that will bill us directly.

 

Thanks in advance.

[Conor]

"It means that we don't know how much it's going to cost us up-front but we're comfortable with the risk."

 

So if it ends up costing a £million, half done, snagging issues, and the builder off the scene, you'd be happy? I assume no mortgage on the property?

[Dave Jones]

you need contract works insurance, £2-5k.

[lookseehear]

25 minutes ago, Dave Jones said:

you need contract works insurance, £2-5k.

Wouldn't the builder have this as the contractor?

 

28 minutes ago, Conor said:

"It means that we don't know how much it's going to cost us up-front but we're comfortable with the risk."

 

So if it ends up costing a £million, half done, snagging issues, and the builder off the scene, you'd be happy? I assume no mortgage on the property?

Yes there's a mortgage but we're paying for works out of savings. If the worst came to it we could fund another 50% overrun without extending the mortgage, but we hope this won't be the case. The house will remain in a liveable state at all times other than potentially a replacement roof which we would deal with as a separate contract with a roofing company.

 

It literally can't cost a million, because the work consists of:

* Single storey extension which is a discrete piece of work

* New roof - to be dealt with as a discrete contract as per above

* Internal refurb/reorganisation

 

We expect the extension to cost ~£70-100k (£100k being £3k/sq m). If that comes in at double our expectation, we will have to compromise on other works and probably wouldn't replace the roof. We won't be putting ourselves in a position where we can overspend to that degree or end up with something we can't live in.