A CAR Insurance (Construction All Risk) is not just a 'nice-to-have' during construction; it is the only legal and financial wall between your project and bankruptcy in the event of a disaster. Where standard building insurance often "checks out" the moment the first hammer is lifted, the CAR policy provides a safety net for the work in progress, your existing property, and that of the neighbors.
The "Black Swan" of Construction: Many clients only realize that their regular building insurance suspends coverage during "major renovations" after the damage has been done. A CAR insurance seals this gap.
The Architecture of Coverage: The Sections (Rubrieken)
A CAR policy is built up of different modules, or "sections". Understanding this structure is crucial to avoid being under- or over-insured.
Section 1: The Work (The Foundation)
This is the core. It covers material damage to everything you are building. Think of:
- Weather Impact: An autumn storm that blows over a newly laid (and still wet) wall.
- Theft: The disappearance of your expensive heat pump or kitchen appliances overnight before the house is locked up.
- Vandalism and Fire: Unforeseen damage by third parties or accidents on the construction site.
Section 2: Existing Property (The Trap)
This is where things go wrong for 80% of renovation projects. Section 1 covers what is being added, but Section 2 covers what is already there.
If your existing thatched roof catches fire while welding new pipes, this is often not covered under Section 1 and also not under your suspended building insurance. Section 2 is the essential link here. Without this coverage, you are building with enormous financial risk.
Section 3: Third-Party Liability (The Neighbors)
In densely populated areas, building is rarely without risk to the surroundings. Piling work that causes cracks at the neighbors, or a roof tile falling on the car across the street. This section protects you against claims from the environment.
Strategic Insight: Who takes out the policy?
Traditionally, the contractor takes out the CAR insurance. However, the smart client considers doing this themselves. Why?
- Control during Bankruptcy: If your contractor goes bankrupt and they are the policyholder, the coverage may stop or lapse. If you take out the insurance yourself, the coverage continues for the new contractor who finishes the work.
- Tailored Coverage: Contractor policies are often "standard". By doing it yourself, you ensure that specific risks (like that expensive monumental floor in your existing building) are explicitly co-insured.
Architect's Advice: Do you still ask the contractor to arrange it? Then demand a copy of the policy schedule and proof of payment of the premium before the first pile goes into the ground. An unpaid policy offers no coverage.
Conclusion
The CAR insurance is your financial seatbelt. You hope never to need it, but if things go wrong during a complex process like a construction project, it is the difference between a delay and personal bankruptcy. Never skimp on Section 2 during renovations and strongly consider keeping control of the policy in your own hands.
Frequently Asked Questions about CAR Insurance
Is CAR insurance mandatory?
Not legally, but in most construction contracts (UAV) it is contractually required. Without this policy, you bear the full risk for damage to the work and the surroundings.
What does 'Section 2' cover?
Section 2 covers damage to your 'existing property' (your current home/building). A standard contractor's CAR policy often does NOT automatically cover this. This is a major pitfall in renovations.
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