RIAI Contract for Insurance

[nabanoga]

Hi, I'm in the middle of getting an extension built. I had forgotten about telling my insurance company so I gave them a call today. It was a much bigger deal than I expected as I'm out of the house at the moment and the cost of the works is more than 20K. The insurance company have said that I am only covered for fire and storm damage and also that I need to provide them with all sorts of details including the RIAI contract. Unfortunately to keep down costs this is a cash build with no RIAI contract (didn't even know what this was until the insurance people asked for it!). The builders have been excellent so far but now I'm worried that I'm doing the wrong thing. Has anyone else had this experience and how did they get on with the insurance company?

 

[Docarch]

I wouldn't be overly worried about the RIAI contract bit (part of the contract essentially just sets out who should insure what)...what you do need to be more worried about is if your builder is insured?

Your builder should have 3 insurance policies, public liability insurance, employers liability insurance, and...the important one...contractors all risks insurance. Check with your builder first if he has these policies. If he does, ask for written confirmtaion of same (value of the policies, etc.,) and go back to your insurance company with details of same.

If your builder does not have contractors all risks insurance...go straight back to your insurance company for further advice. You may have to take out an additional policy to cover the works or the builder may need to get himself a contractors all risks insurance policy (a.s.a.p.).

Usually (but not always*) for works to an existing house, the client insures the existing house/structure and the contractor insures the new works (this is what the contractors all risks insurance policy is for).

* Note that the RIAI contract does not stipulate that the builder must have contractors all risks insurance...there is one clause in the contract stating that the contractor should have this insurance and another part of the same clause where it states that the client takes out the necessary insurance (at the start of the contract it is agreed who is to insure and the relevant section of the contract is struck out).

 

[Floorplan]

Just to add to the last post (and to avoid any misunderstanding).

It would be unusual for Contractor's All Risks insurance to cover existing structures (the Contractor usually has no insurable interest in the existing structure).
So the OP should be working off the basis that the Contractor is not insuring the existing property.
The risk to existing structures will lie with the property owner unless agreed otherwise.

So the OP should work off the basis that the existing house is currently uninsured should something happen - so should hurry to resolve the issue.

Bring the details of the CAR policy (if any) to the insurer and give them any drawings of the works together with details of anything significant - e.g. roof being replaced, house not in occupation for X days, internal walls being removed, security/access to the existing house during the works (e.g. windows missing, access through the new works etc.).

Hopefully the insurer will not require additional information on the contract between yourself and the Contractor. Otherwise see if the Contractor is amenable to agreeing to sign a written form contract - such as the RIAI form.

To reiterate, it appears the existing house is currently uninsured - so the OP should move quickly.

www.floorplan.ie

 

[threebedsemi]

You could also look at taking out self-build insurance, some of the policies cover works to existing properties, and it may end up cheaper.

It is my understanding that, depending on the type of contract used, the contractors all risks insurance will cover the entire property for damage caused by the builders negligence while working on new the section.

The above posts are the kind of advice that your architect/engineer/consultant should be giving you, if you have one.

www.studioplustwo.com

 

[sbs_darragh]

Hi, I'm in the middle of getting an extension built. I had forgotten about telling my insurance company so I gave them a call today. It was a much bigger deal than I expected as I'm out of the house at the moment and the cost of the works is more than 20K. The insurance company have said that I am only covered for fire and storm damage and also that I need to provide them with all sorts of details including the RIAI contract. Unfortunately to keep down costs this is a cash build with no RIAI contract (didn't even know what this was until the insurance people asked for it!). The builders have been excellent so far but now I'm worried that I'm doing the wrong thing. Has anyone else had this experience and how did they get on with the insurance company?

I dont have a whole lot of sympathy for you. You chose to go down the route of an underhand cash deal and it has now come back to bite you in the ass. By choosing to pay cash and avoid VAT, you have lost all priveliges and assurances of using an insured, tax compliant company. I hate this with a passion. If anything happens your house now, I'm afraid you are on your own. You have also left yourself wide open should an accident occur on your property. And dont expect any guarantees or warranties with the finished product. If I were you, I would go back to the builder and ask for invoices showing full amount of VAT due, put a contract in place which is administered by a professional, and make sure the builder has all necessary insurances to cover your property. You can expect the builder to raise his price accordingly to cover all this administration and extra expense but to be honest this should all have been in place before any work commenced.
Hopefully next years revised building regulations will weed out cases like this as the homeowner and the builder will have to sign a declaration before any work commences.

 

[kkelliher]

Hopefully next years revised building regulations will weed out cases like this as the homeowner and the builder will have to sign a declaration before any work commences.

As with all of our uninforced laws i would love to know how a job like the op has outlined where clearly no declaration would be signed would come to the attention of authorities

 

[threebedsemi]

Well, anyone carrying out any significant building works is currently required to lodge a 'Commencement Notice' to the Local Authority 14 days prior to commencing construction.
This will not change with the new regulations.

Of course, we can't be overly annoying the plain people of Ireland with this kind of stuff, so any domestic extension under 40sq.m. (as far as i remember this is the figure, i haven't checked it) WILL NOT HAVE TO COMPLY WITH THE REQUIREMENTS OF THE NEW REGULATIONS.

So. and some may say ironically, the majority of building works which will be going on in the next couple of years will not be subjected to the 'rigours' of the new system. They will still, of course, have to comply with the building regulations - something the majority of extensions at the moment almost certainly don't fully do......

It is also ironic that the construction works which will get a boost from the recent Budget VAT back scheme (small domestic works), will not have to comply with the requirments of next years regulations.


www.studioplustwo.com

 

[kkelliher]

I was of the understanding that all works are subject to the new regs including those under 40 sqm unless there is a typo in the regulation

 

[threebedsemi]

At Paragraph 2 (b) of the regulations as published on the Department website at present (page 80):
http://www.environ.ie/en/Legislation/DevelopmentandHousing/BuildingStandards/FileDownLoad,32732,en.pdf

it says that certain requirements of the regulations will only apply to extensions 'no greater than 40 sq.m'. The Departmment, afaik, have stated that this is (of course) a typo and it should read 'greater than' 40sq.m.

Thus the proposed rigmarole with assigned certifiers, designers et al will not, in the final regulations, apply to small domestic extensions.

Of course, all building works must still comply with the building regulations themselves, but why this exemption is in there at all is beyond me. It is a clear nod and wink, imo, to the the small builders/clients that they 'can carry on as before'.

www.studioplustwo.com