When a leaseholder applies for permission to carry out home improvements, we must provide them with our home improvement procedure so they can update their buildings insurance where needed.
It’s completely understandable that leaseholders want to make changes to their homes, and in most cases this is allowed. The usual process is for the leaseholder to request permission in line with the terms of their lease. The officer managing the property then reviews the application, confirms whether permission can be granted, who can grant it, and whether there is any reasonable basis to withhold it.
How insurance is affected
While this process covers new improvement requests, we also know that some leaseholders may have already made changes to their homes that could affect their insurance position.
While decorative updates, such as painting, rewiring, replacing boilers, or installing new kitchen units may improve the appearance of your home these do not necessarily increase its rebuild/reinstatement.
However, structural alterations or high value enhancements - such as adding bedrooms or bathrooms, installing marble flooring, oak staircases, or other premium fittings - can increase the rebuild or reinstatement value of a property. If the buildings insurance does not reflect this higher rebuild cost, the home may be underinsured from things like fire, subsidence or escape of water. In the event of a claim, insurers may reduce the payout proportionately to the level of underinsurance.
What leaseholders need to do
If you are a leaseholder and you’re planning works that could increase the rebuild value of your home it’s essential that you talk to your local officer. They should then:
- Provide you with our home improvement procedure
- Advise you to obtain a RICS approved buildings rebuild valuation
- Ask you to supply this valuation to NHG once completed
This helps ensure your home is properly insured and protects you from the risk of reduced payouts if you ever need to make a claim.
