SPECIAL FEATURE: DIY disasters ahead – don’t forget cover

Robyn Hall

July 29, 2013

We all know that first impressions count when it comes to selling a home.

Anyone who has watched ‘Location, Location, Location’ over the years will be well-versed in the importance “kerb appeal” and the “wow factor” – and there are dozens of home makeover shows that make it look easy to achieve.

Most of us will have undertaken some home improvement projects prior to placing a property on the market, convinced that by adding some decking or an en suite, upgrading the kitchen or simply painting the front door we will make our home irresistible and potentially worth thousands more. Of course, the reality is that the cost of the work will not always be covered by the potential increase in the value of the property, let alone the time it has taken or the stress it has caused. However, that’s not the only risk.

Unintended Consequences

Well-intentioned DIYers can wipe thousands from the value of their home with ill-advised or poorly executed improvements. One couple extended the downstairs space of their 4-bedroomed home so much that they left no outside space – disastrous in terms of both the value and saleability of the property. Another couple turned a 3-bedroom property into a two bed, gaining a little wow factor in the enhanced room dimensions no doubt, but knocking 25% off the property’s value in the process.

In extreme circumstances, DIY can literally bring the house down. One man wanted a new paint job for his house and did what many do, burning old paint off the woodwork. In doing so, he started a fire that left not only his family homeless but three others as well. Although this is an extreme example it’s a good place to start in looking at the role of insurance in mitigating the consequences of DIY disasters.

DIYer beware!

One of the most common conditions applied in household insurance is that the policyholder must take all reasonable steps to prevent loss, damage or injury. However, in the example above, because any fire damage is explicitly covered in most household policies unless intentionally started, the losses would probably be covered. However, if the hot air gun used to strip the paint hadn’t started a fire when laid down, but only singed a carpet or a piece of furniture – ie. if there were no flames – then that damage would not be covered under the average buildings and contents policy, because it was the homeowner’s fault. However, it would be covered under the Accidental Damage extension if the client had selected that option when arranging the policy.

Top Tip #1

Advise clients who might be considering improvements to take out Accidental Damage Cover

AD cover on Buildings and Contents will give your clients better cover for all sorts of DIY disasters:

• If they knock a hole in a pipe putting a picture up, AD cover would not only cover the Escape of water, but also repairing or replacing the pipe itself

• If they spill the can of paint whilst decorating, they will be covered for the damaged carpet.

• If they’re in the loft and slip and stick a foot through the ceiling – this would once again only be covered under AD

Top Tip #2

Advise clients to keep their insurers informed of any alterations they’re planning

Most Insurers ask that policyholders inform them when work is being done on their property. Failure to have done so could invalidate any claims resulting from the project. There is rarely clear guidance on the nature or scale of the alterations that should be notified, but you could be doing your clients a favour to advise them to notify the insurers before commencing anything beyond redecorating.

If the policyholder is having contractors into the property to have work done. This always needs to be notified to the insurers – after all, they will have non family members with access to the property- and the theft risk is therefore increased. If they are having work done, then there is more potential for damage to be caused – such as Escape of Water or Fire if hot works are being carried out – the insurers need to know if the contractors you are using have their own insurances in place to cover any damage they may cause. The security of the property may also be compromised – if windows or patios doors are being replaced, there will be a period during which security is reduced. If they are replacing the roof, there is increased damage by rain/storm until the work has been completed.

Top Tip #3

Advise clients to consider taking out Home Emergency Cover

Home Emergency Cover (HEC) protects clients against the call out charges, repair bills and material costs for many of the problems that could arise as a consequence of a home improvement project:

• Water supply system failure (including blocked drains within the boundaries of the property)

• Electricity failure of at least one complete circuit

• Gas leak

• Primary heating system failure or breakdown

• Failure of, or damage to, external door & window locks

So if your client or their builder damages a pipe, which might lead to the house being flooded, an HEC insurer approved plumber will repair of the pipe. Of course, they are only going to repair the damaged pipe – not finish re-plumbing the bathroom. Likewise an HEC insurer authorised electrician would repair any damage to the electrical wiring – but not carry on helping rewire the kitchen.

It’s a great peace of mind to any DIYer who might find themselves suddenly out of their depth, or suffering the consequences of bad workmanship by their contractor.

If your clients follow these tips, then they will be as well protected by their insurances as possible should DIY disaster strike.

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