The Insurance Council of New Zealand (ICNZ) has advised homeowners to make sure they’re insured if they’re going to be doing any significant renovations to their property, NZ Herald reports.

The comment follows an issue involving an Auckland couple who are neighbours of a property undergoing excavation works. The couple were concerned whether their insurance would be able to cover their home in case it was affected by the neighbouring works.

According to an ICNZ spokesperson, damage caused by the neighbouring works could potentially be covered –depending on what kind of damage it was and the specifics of the person’s policy.

“If the damage was a result of land slippage, your insurance won’t cover it as private insurers don’t insure land in New Zealand,” the spokesperson told NZ Herald.

“If the damage was not caused by land and doesn’t fall under any other exclusion in your policy – such as resulting from gradual damage instead of an accident caused by the renovations – then your insurance will likely cover the damage. Any exclusion will be clearly laid out in your policy documents.”

The spokesperson emphasised the importance of being insured and meeting all local body requirements before renovating, including acquiring appropriate consents.

“It’s important to be aware that a contract works policy is unlikely to cover any damage if the work that caused it is being done illegally,” the spokesperson said.

Steve Pearce, regulatory compliance manager at Auckland Council, also advised homeowners to check with their council before starting any building work.

“All building work in New Zealand must comply with the Building Code and Unitary Plan. Most projects will need a building consent and many a resource consent. This ensures work is completed in a safe and satisfactory way,” Pearce told.

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