Chimney removal 4 tips you wish you knew before start
The chance that you are reading this article and the fact that you have a chimney is very high to be called a perfect strike. Let me confess here, I love my job and my job here is to explain how a correct insurance structure can help you to avoid all possible problems with your house insurance if you decide to undertake such a task as chimney removal.
Before I am going to explain in details Chimney removal using Site Cover insurance please allow me to set the scene.
In New Zealand thousands of great homes have chimneys. Due to modern technology and ultimate house owner’s desire to create usable space in the house lots of house owners vote against a fire place and subsequently against their chimney.
If you are one of those people who are thinking about removing a chimney and /or the fireplace in your house, first you need to get your ducks in the row. I am not talking about getting a permit from the local Council , this is what you have to do anyway. My goal is to explain how your house insurance would respond in this event.
Please note, your existing house insurance is not designed to protect you and your property from misfortune associated with removal of a fireplace and or a chimney.
At the end of this article I am going to provide you with downloadable and printable set of documents we discuss here. It would allow you keep the documents till the day you need them, aka till the day you want undertake
Chimney removal project
For the sake of this article let’s assume that you have house insurance from a reputable insurance company. Reputable, what is that exactly? Well from my point of view: any company which uses an intermediate channel to sell insurance policies that company creates.
Reason I say it is in fact important is based on the second and realistically additional level of consumer protection arising from indemnity insurance of an intermediate agent has. This means if you for instance followed my advice with a resultant loss you would be able to recoup your loses through my indemnity insurance provided I made an intentional mistake.
You see the difference between an insurance policy purchased from a direct insurer and a company which offers products through intermediaries is that, a direct insure policy illuminates the above option leaving you on your own.
Last point here is, please, think about a hypothetical claim situation where you have to proof that you are right… who would have more money for a team of lawyers you or an insurance company you want to sue? I hope you know what I mean here.
For instance you have your house insurance from AMP and the policy is underwritten by Vero.
Let examine would that house insurance policy cover you in the event you decide to get rid of the old fire place and the chimney to create more space in your house.
I have promised you in the beginning that all information is going to be provided to you as a downloadable source. Please use that opportunity to download the set of references for your own paper trail and make sure you keep it by saving it on your computer.
AMP House insurance policy states:
The policy extends to include cover for loss to:
- any new separate structure being built at the situation address shown on the schedule that you own (or are responsible for while it is being built), provided that it falls within the definition of home and would be covered by this policy when complete;
The point above is not applicable to the discussion we are having now- if you were to build a stand-alone sauna then yes, since you want to remove the chimney this is not for you.
- any work being undertaken to upgrade existing fittings or features in the home; The above one is debatable – would you say a chimney is a feature or a structure? In my opinion it is in fact structure therefore not applicable again. A feature would a pizza oven in the yard.
- any materials at the situation address shown on the schedule that are to be included in the new structure.
Well, you only want to remove existing chimney. Not applicable. If on the other hand you are building a pizza oven then we can say that bricks for the oven are in fact insured with your house insurance.
Cover will only apply to loss caused by any of these events:
- fire, explosion, lightning or natural disaster; or
- storm or flood (excluding any exposure to normal weather conditions); or
- riot, civil commotion, strikes, or labour disturbance; or
- impact from aircraft or other aerial or spatial device, or articles dropped from them; or
- impact by any vehicle or animal.
The above simply means that there is no cover for all (1-5)
This Benefit will not cover structures or work:
- where the expected value of the complete work, or the price of the contract including materials, is more than $25,000;
The above point makes me think that in the event it is in fact a simple work and the chimney you have is really small and the amount of the contract you have with your builder does not exceed $25,000 you might be able to get away with a notification to your insurer that this is the intention you have (chimney removal) and with underwriter’s permission you might be able to get all done without any additional insurance expense (new or additional policies). However please read on:
- that involves excavation more than 1-metre-deep; (This is if you were building a swimming pool)
- that involves an extension, such as an additional room, being added to an existing dwelling; or
- that you are building for commercial purposes; or
- that has not been granted a Building Consent or similar, if one is required; or
- that is subject to a separate contract works insurance policy.
Our liability under this Benefit will be limited to $25,000 during any one period of insurance.
What we just completed is that we have reviewed “small” print of your house insurance policy. Keep in mind this example is based on AMP House insurance.
AMP house insurance policy is in many ways a superior policy to compare with many others available on the market. If in fact you have house insurance from a different insurance company you might not have all of the above at all and the policy you have is very basic with limited level of cover. For your convenience if you want to read more about house insurance comparison please click here.
Since we just established the fact that existing house insurance would deny any claim arising from or due to changing the structure we are back to square one:
Chimney removal using Site Cover insurance
The only cover which subsequently covers you as the house owner is Site Cover insurance taken in conjunction with your house insurance.
When you take Site Cover insurance it would be linked to your house insurance where Site Cover insurance covers everything regarding all the structural work like chimney removal and the house insurance takes care of the existing structure. There are examples of work where you as the house owner would be better off by having Site Cover insurance including cover for existing structure.
This is recommendable when you are going to have a major renovation to the house and you are in the position where you want to exclude any options for your insurer to deny your claim.
As the final part of our discussion let’s examine a few other points of Site Cover insurance so that you would know about as much as an insurance professional knows. Keep in mind when I say “insurance professional” I am not talking about a bank manager or a call centre employee who follows the script – I mean someone who actually works in the field of liability insurance and understands it.
Construction Insurance - Get online quote
Note: Construction Insurance is only for Contract works where the contract period is less than 24 months, contract value is less that $4 million dollars and replacement of existing structure is less than $2 million dollars.
“Maintenance period” with every Site Cover insurance you are given an option to provide your insurance company with a number of days to “complete” the work. In my view the length of the period should be realistic”. (Provided the contract works are completed) the period up to but not exceeding the maintenance or defects liability period specified in the contract documents and the maintenance period shown on the schedule.”
The following part is designed to show some differences which can be crucial and their subsequent impact on your wellbeing as the home owner.
- You as the site/house owner are provided with an additional level security: – you can insure your subcontractors. Or totally rely on their Public Liability insurance policies while they remove the house chimney. Insure or not insure your subcontractor is entirely your decision.
My view on it is simple but before I share it with you let me ask you a question: Would you be happy to take a chance? And gamble with the situation? Or would you rather keep everything under control making sure that you house is correctly insured and all possible risks associated with the job (Chimney removal) stays with the same insurer? I hope I managed to make myself convincing. Think about that, in fact it can be seen as a simple thing to do “chimney removal” still can be very complicated and most importantly extremely expensive if something goes wrong. For instance, think about that: for a period of time the roof of the house is going to be open….
- Important. Specifically notify your insurer that you are going to undertake Chimney removal. This type of work requires specific underwriting and your application is going to be referred to underwriters and your policy schedule once it is issued is going to say:
Work sub-types include: removal of chimney; clause 560
- You would want to let your insurer know that:
- You live in the property while work is getting completed
- The property is vacant
- You would want to include earthquake cover. (You know why, right?)
To finalise, insurance can be very simple or extremely complicated. Make sure you have correct insurance and if unsure or want to discuss something in relation to the project you are planning to start, give me a call.