'Don't Do-It-Yourself' Says Home Insurers Halifax, Zurich & Sainsburys

NCD News: Halifax, Zurich & Sainsburys Home Insurance - 24.06.08

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'Don't Do-It-Yourself' Says Home Insurers Halifax, Zurich & Sainsburys: Insurers have warned homeowners of the dangers that DIY projects can pose on their home insurance cover such as invalidating coverage and eliminating no claims discounts after homeowners submit claims for their DIY disasters. The insurers informed homeowners because many Britons (21% of homeowners, according to Sainsbury‚Äôs research) are attempting to overcome sagging real estate prices by undertaking DIY home projects such as converting lofts, excavating basements and constructing new rooms. In attempting to increase their home‚Äôs value, homeowners may inadvertently harm their personal financial situation in three ways:

1. By causing a DIY project debacle that will be covered by the insurer, but eliminate any no claims discount that the homeowner may currently have.

2. The DIY error may not be covered by the insurer and the homeowner will actually have to pay to correct the problem.

3. In the event of a very large loss, such as a fire, the insurer may refuse to pay part or all of the claim because the homeowner never informed the insurer of the DIY project.

Zurich Insurance reports that nearly 17% of all homeowners who have attempted DIY projects have contracted experts to correct their errors. Approximately 33% of these ‚Äúrescued‚Äù projects were begun with the belief of saving money, but in the end, cost more money as professionals were hired to correct the problem and finish the project.

Information from experts at Sainsbury, Zurich Insurance, and the www.financialadvice.co.uk website recommend that these steps be followed by homeowners to prevent financial problems like invalidating insurance cover or eliminating no claims discounts:

1. Call your insurer to ensure that coverage exists if DIY projects turn problematic, and to verify that structural changes won‚Äôt void the insurance policy.

2. Fully inform your insurer of the proposed project so that they can make the necessary changes, if any, to your policy‚Äîthese adjustments to premiums could be less costly than losing your insurance coverage. Sainsbury‚Äôs research indicated that 33% of people that planned structural works were unaware that they had to inform their insurer prior to beginning the work.

3. For new homes, verify that DIY projects will not invalidate any building guarantees that may exist.

4. Determine whether there is the potential of damaging neighbours‚Äô homes. Halifax reports that £173 million of damage to neighbours‚Äô property was caused by well-intentioned DIYers. Although 67% of these victims paid to repair damage to their own home, a substantial number of DIYers had to incur additional costs to repair the damage that they caused on their neighbours‚Äô homes.

5. Hire professionals, if necessary. The National Home Improvement Council believes that if DIY projects would invalidate coverage, then project experts should be hired because professionals must carry insurance and the professional‚Äôs policy will pay for problems that the home may incur because of the project.

6. Place personal items and furniture in off-site storage centers since these items may not be covered by home insurance policies.

As the credit crisis remains and house prices continue to fall, follow these steps prior to beginning a DIY project. These steps could save you money and prevent any unpleasant surprises with your insurance cover. †