....how do you handle the increased price, especially if it is for an issue that could/should have been noticed when the initial quote was given?

Our current situation:
We're having our family bathroom completely renovated, top to bottom - new floors, new walls, new tiling, new fittings, etc. The work started today with the builder pulling everything out to see what exactly we're working with (we've only been in our house since Nov so a lot of it is a surprise to us as well). As with just about any home renovation project, there were of course some unpleasant surprises.

The biggest issue is with the ceiling and an old leak, which has destroyed part of the ceiling. You couldn't really see any damage from the outside, other than a bulging ceiling and peeling paint, but once the builder actually got up there today and started poking around, he realised a big section was rotten and would need to be replaced. I'm ok with paying for that additional cost as it wasn't foreseen to be an issue, although I could say as a builder, he should have seen the bulge when doing his quote and mentioned what it could potentially mean then, but whatever, not going to argue that point.

The main issues I'm having are with problems that were fully visible when the builder did his quote and should have been noticed then to be incoporated with his initial quote. One issue is with the drainage pipes, another is with some electrical wires - both are proving problematic and are going to require additional funds to rectify, but I feel as though the builder should have seen these things and quoted us for them from the start - I'm not entirely comfortable with the idea that we should be out an additional several hundred pounds for work when it wasn't what we budgeted for.

Am I being unreasonable here in thinking that the obvious problems should have been included in the quote and if they were overlooked by the builder, that onus shouldn't necessarily fall all onto us? FWIW, these issues (including the ceiling) increase the cost of our project by £1500-£2000, which is a huge amount of money ($2500-$3000 USD roughly)! Also, DH is a project engineer so he is accustomed to tradeys trying to milk things for all they're worth, hence, he is taking a pretty firm line in wanting answers to all these tough questions, but I'm the one here dealing with the builder and having to have these awkward conversations!

What do you do in situations like this? Do you just pay the extra cost, knowing that situations come up, or do you expect your initial quote to cover issues that should have been noticed?

Also, as a sidenote, I'm super annoyed already that the builder and his plasterer are going through my coffee and juice as though it is an open snack bar. I buy expensive juice for my girls and these guys are guzzling it as though it's water - I didn't even offer juice, they asked for it! And seriously, asking me to make you three cups of coffee in four hours of work is a little but cheeky in my opinion! Sorry, random vent there!