Does home insurance cover renovation costs?

Generally speaking, some home insurers will compensate you in the following circumstances:

• Losses incurred from accidents during moving. For instance, when your furniture was damaged after accidentally bumping into your front door. 
• Some home insurances include "property damage cover during renovation", which covers accidental damage or loss during renovation or repairs. Flooding during renovations and stolen properties are two examples. With that said, you should pay close attention to any additional conditions for coverage, such as renovation can last for no more than two months, and the cost should not exceed the specified amount, etc.
• If you need to revamp your home due to an accident, some home insurance plans will cover the cost of your temporary accommodation. For instance, you might need to rent a service apartment after a house fire.

In other words, if you are planning to find a renovator to remodel your new home, a majority of home insurance plans on the market are not sufficient to compensate for the renovation works in your home.

Note that usually, "home renovation coverage" does not compensate for losses during the renovation works! This is because "home renovation" does not refer to whole home remodeling projects. Instead, it refers to partial renovation and furnishings added afterwards, such as false ceilings, wooden floors, or doors. If these furnishings are unintentionally damaged, the owner can be compensated, but only for homes where the renovation works have already been completed.

Basically, "home renovation coverage" does not cover any losses incurred during the renovation, repair or remodeling works period of your flat!

While your flat is being renovated, the first thing you need is third-party liability insurance and contents/property insurance. Home owners can consider buying either renovation insurance or home insurance. Your second priority should be in securing labor insurance. This is usually done by the home renovators or the project/works contractors.

Although home insurance already includes third-party insurance liability protection, note that it only compensates the policyholder, their family members and domestic helpers for third-party accidents caused by negligence. In other words, damages caused by the renovation contractor will not be covered. Hence, we recommend purchasing third-party insurance for renovation to compensate for the legal liabilities incurred by the refurbishment.

The premium for renovation works ranges from about HKD $1,000 to several thousand dollars, and it covers around HKD $1,000 to HKD 20,000,000.

Let's say you are the one doing the renovating, then you unwittingly busted the water pipe and flooded your same-floor neighbors' flats and even the elevators. Your liability insurance for home insurance will cover this situation. This is because the homeowner is the proximate cause of this accident, and not the renovator or the works contractor. See also: 12 surprising things covered by home insurance. 

Before signing a contract with a home renovator, check whether the company has secured third-party insurance and labor insurance. Make sure that the name of the insured company on the policy is the same as the name of the construction company. Also, check the validity period, insured amount, number of insured employees, and job nature. Especially in terms of the nature of work, if it is for a clerk, then the insurance policy will not protect the construction staff.

In addition, you should also note that most interior renovation insurance may not cover scaffolding or exterior wall works. If you plan to carry these out, remember to check the insurance coverage and exclusion clauses.