Luxury Home Insurance During Renovations: What Australian Homeowners Need to Know
Home insurance may provide limited cover during renovations, depending on the policy, the type of work and the insurer’s acceptance. Before renovating a luxury home, confirm how the existing building, construction works and contents will be insured throughout the project.
A kitchen refurbishment, structural extension or complete architectural redesign can change the risks associated with your property. Parts of the building may be exposed, security arrangements may change and valuable possessions may need to move into storage.
For owners of prestige homes, reviewing insurance before work begins helps identify gaps that are harder to address once demolition, deliveries and construction are underway.
Does home insurance cover renovations?
Some home insurance policies allow certain building works, subject to conditions. Others restrict cover according to the project’s value, structural changes, occupancy or other factors.
There is no single renovation threshold that applies to every Australian home insurance policy. A dollar limit mentioned by one insurer should not be assumed to apply to another.
The important distinction is between insuring your existing home while work takes place and insuring the renovation works themselves. Acceptance of the renovation under your home policy does not necessarily mean every aspect of the project is covered.
Ask your insurer or adviser to confirm:
Whether the proposed work is acceptable under your current policy.
Which parts of the existing building remain covered.
Whether construction works and materials need separate insurance.
Any changes to excesses, exclusions or security requirements.
What information must be provided if the project changes.
Obtain written confirmation of the agreed arrangements before work starts.
When should you tell your insurer about a renovation?
Contact your insurance adviser during planning, before signing the building contract where possible, and before construction begins.
Early discussions allow time to consider the proposed work and clarify which party is responsible for arranging each type of insurance.
Prepare a project summary covering the scope, estimated cost, builder, expected dates and occupancy arrangements. Explain whether the work involves structural alterations, roof removal, demolition or openings in external walls.
For a luxury renovation, also identify owner-supplied items and separately contracted work. Imported fittings, custom joinery or specialist installations may sit outside the main builder’s contract.
A useful question is: “Does the proposed insurance arrangement account for the whole project, including the parts I am organising directly?”
What is the difference between home insurance and contract works insurance?
Home insurance and contract works insurance address different aspects of the property and project.
Existing-home insurance
Your home policy covers the insured building and, where selected, contents under its terms. Renovations can affect that cover, so the insurer needs to assess the circumstances.
Contract works insurance
Contract works insurance, also called construction works insurance, is designed to address insured loss or damage involving construction works and relevant materials. The scope depends on the policy.
Some arrangements can include existing structures, but this should be confirmed specifically. Do not assume that insuring an extension automatically insures the entire original house.
Liability insurance
Liability cover addresses specified legal liabilities, subject to its wording. It should not be treated as confirmation that the renovation and existing building have property-damage cover.
The objective is to establish how the policies work together and identify any part of the property or project that falls between them.
Does your builder’s insurance cover your existing house?
A builder having insurance does not, by itself, confirm that your existing home is protected. The relevant policies, insured parties, limits and project details need to be checked.
Consider a hypothetical renovation involving a new rear extension attached to an established luxury home. The project includes new works, but much of the property already exists.
The insurance review should answer separate questions about damage to the extension under construction and damage to the original building.
Request evidence of the builder’s relevant insurance and have the arrangements reviewed against the project. Ask specifically:
Is the existing structure included?
What amount is allocated to it?
Does the arrangement account for materials supplied by the homeowner?
What exclusions or excesses are relevant?
When does the construction cover begin and end?
A certificate of currency helps establish that a policy is in place. The policy terms and endorsements are still needed to understand its scope.
What happens if you move out during renovations?
Tell your insurer if you plan to live elsewhere during the project.
Ask how the policy defines an unoccupied home, whether the anticipated period is acceptable and what conditions apply. Do not assume that tradespeople attending during the day means the property is regarded as occupied.
For example, give your adviser a clear description:
“We expect to move out for six months. The builder will attend on weekdays, furniture will remain upstairs and part of the ground floor will be open during construction.”
That information provides a more useful basis for an assessment than simply saying the house is being renovated.
If the programme changes, ask whether the revised absence or construction period affects the agreed insurance arrangements.
How should you protect art, jewellery and luxury contents during building work?
Create a plan for valuable possessions before contractors arrive.
Identify which items will remain at the property, which will move to temporary accommodation and which will go into professional storage. Then ask how insurance applies at each location and during transport.
For significant artworks, antiques and delicate furniture, discuss handling and storage requirements with an appropriate specialist. Keep photographs, inventories and available valuations together.
Questions to resolve include:
Does existing cover extend to the storage address?
Are packing, transport and temporary storage covered?
Are there limits or conditions for particular items?
Who is responsible for arranging transit insurance?
Does cover need to be updated when possessions return?
Avoid assuming that a removalist’s or storage provider’s insurance replaces your own cover for the full value of the collection.
What site-protection measures should you discuss with the builder?
Insurance is one part of protecting a home during construction. Agree on practical site arrangements with the builder or project manager.
Discuss how fire and security protection will remain effective, how the site will be secured after hours and how combustible waste will be managed. Ask who checks the property at the end of each working day.
For a high-value residence, consider whether the project provides an opportunity to improve water-leak detection or other protective systems.
These discussions should also account for any conditions imposed by the insurer. Do not assume that a particular security upgrade guarantees a premium discount.
What if the renovation runs over time or budget?
Treat significant changes as a reason to revisit the insurance arrangements.
Construction cover may have a defined expiry date, maximum construction period or completion trigger. A delayed project should not be assumed to remain insured indefinitely.
Similarly, increased costs, additional works and separately purchased fittings may affect the values that need to be declared.
Keep your adviser informed about changes to:
The expected completion date.
The scope or value of the project.
The period the home will remain unoccupied.
Site security or protection arrangements.
The timing of handover and reoccupation.
Clarify the transition from construction insurance to the completed home’s insurance before that transition occurs.
Should you increase home insurance after renovating?
Review the completed home’s rebuilding requirements and contents values.
A renovation can introduce additional floor area, better-quality materials, new structures and more expensive fixtures. The previous insured amount may no longer describe the property adequately.
The renovation budget alone is not a complete rebuilding assessment. Ask whether an updated professional assessment is appropriate for the finished home.
Retain final plans, photographs, specifications and relevant invoices. These records help document what has changed and support a more informed insurance review.
Frequently asked questions about renovation insurance
Do I need to notify my insurer about a luxury kitchen renovation?
Contact your insurer or adviser before work starts. Explain the cost and scope, including plumbing, electrical work, structural changes and any alterations to occupancy. The applicable requirements depend on your policy.
Can I keep my existing home insurance during a major renovation?
Possibly, subject to the insurer’s acceptance and any amended terms. Obtain confirmation of what remains covered and whether additional or alternative insurance is needed before making changes to your existing policy.
Does contract works insurance automatically cover the original building?
Do not assume so. Confirm whether existing structures are included, their insured amount and the applicable conditions. Cover for the renovation works and cover for the original home need to be checked separately.
Will home insurance pay for accommodation while I renovate?
Do not assume planned relocation expenses are covered. Temporary accommodation benefits generally relate to defined insured circumstances. Ask whether any benefit applies to your situation and budget for the renovation accordingly.
Discuss your renovation plans with Luxsure Insurance
Luxsure Insurance assists owners of prestige homes and valuable possessions with their insurance requirements.
Before renovating, provide your adviser with the proposed scope, building contract, project dates, occupancy plans and current insurance documents. Include details of significant contents and any items moving into storage.
Contact Luxsure Insurance to discuss how your planned renovation may affect your luxury home insurance and what needs to be reviewed before work begins.
General information only. Consider your circumstances and the relevant policy documents. Cover is subject to insurer acceptance, terms, conditions, limits and exclusions.
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