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Home renovation is sort of a matter of great importance in life, owners often have to spend a six-digit or even seven-digit sum, to build their own dream home. However, many people think they only need to purchase a Third Party Liability protection to fulfill the basic requirements when preparing for renovation works.
In fact, the risks and dangers posed to projects cannot be overlooked, or else your carefully chosen building materials such as flooring and wallpaper could be ruined. This time, “Smart Living@Kenneth” is here to introduce to you an insurance type that is less well known to consumers: the importance of Contractors “All Risks”, that can offer your renovation works with the most comprehensive protection!
Can you claim for damages to building materials?
Working hard to buy a property, of course you would want to build a dream home by carefully choosing your own materials. However, in the months-long renovation works, many unexpected events may happen and cost you a fortune.
AXA has received claims that quite often involve accidents such as soaking and ruining of wooden flooring by rain after renovation workers put them by the window; or an unlocked door during a typhoon when glass windows were blown open, leading to soaking of walls and wallpapers. Even worse, quite a few owners have encountered renovation workers who accidentally broke their windows or damaged their electrical appliances. If your renovation project is only covered by Third Party Liability protection, many of these losses will not be covered, and you will have to pay out of your own pocket for new materials.
However, if you have already obtained Contractors “All Risks” Insurance before renovation works begin, you will be able to claim for the aforementioned losses, including damaged floorings and wallpapers. Contractors “All Risks” Insurance even covers damages to others contract materials, such as decorative materials (mirrors, marble countertops), sanitary wares (bathtubs, water taps, smart toilets, washing basins in toilets and kitchens) etc, giving you a more comprehensive protection during renovation works. Furthermore, it even comes with a 3-month-long warranty period to cover any leftover works after completion.
In short, you don’t have to worry about incurring an extra sum of expenditure for losses in expensive materials due to accidents.
Risks to note during contract works
During contract works however, your own losses are often a small matter, while damages to others always turn into a big headache for property owners. Many property owners will have a similar experience, in that even if you keep a close eye on the works progress, there are still chances of various accidents occurring, leading to damages to others, neighbours or even the building itself and financial liabilities.
For example, if the renovation worker is careless and accidentally drills through a wall, that could lead to repair and cleaning bills as expensive as tens of thousands of dollars. Likewise, a mishap in removing a toilet, causing a collapse in the floor and damaging the bathroom in the flat below with electrical appliances and sanitary wares there destroyed, could lead to compensating not just for the damaged parts, but possibly even for the hotel expenses the neighbours paid for during the repairs of their property.
Even worse, fitting water pipes incorrectly could lead to the backflow of sewage water into other people’s properties, and even affecting common facilities of the building such as the elevators, not unlike stories you hear in the news. In these situations, if you have not obtained any contract works insurances, all the liabilities will be borne by the property owner, which could cost you far more than the contract fees itself. But contract works insurances could provide a third party liability coverage of up to HK$30,000,000 for damages or losses due to accidents and negligence on the part of contractors and property owners.
Spending a bit to protect yourself and others
Having said all this, you may be wondering, these insurance types that cover even your own losses must cost a fortune. But actually, the calculation of the premium all depends on the contract sum and third party liability sum insured. For example, a contract sum of HK$400,000, with no scaffolding work involved and a third party liability insurance sum insured of HK$20,000,000, would only cost a premium of HK$2,000.
Even if you are carrying out relatively simple contract works, such as flooring changes, or replacing air-conditioners and windows with scaffolding involved, you can also purchase the insurance and get coverage accordingly for the accidental losses and third party liabilities. Therefore, if you are carrying out renovation works, think ahead of the relevant risks and get insured!
The above content is reviewed by Mr Kenneth Lai - Chief General Insurance Officer of AXA Hong Kong and Macau.
No warranty or responsibility is assumed by AXA Hong Kong and our related or holding companies regarding non-infringement, security, accuracy, completeness, adequacy, reasonableness, fitness for a purpose or free from computer viruses in connection with the information and materials provided. AXA Hong Kong and our related companies and holding companies do not accept any liability for any loss, damage, cost or other expense, whether wholly or partially, directly or indirectly, arising from any error, inaccuracy or omission of the information and materials to the extent that such liability is not excluded by law.
An insurance designed for property owners or tenants about the interior renovation of home, shop or office.