SHOULD I NEED NEW HOME BUILD INSURANCE

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With the ongoing demand for houses, new-build projects are increasingly common – from property developers planning whole estates, to individuals choosing to build a home rather than buy one.

When you plan a new project insurance, you can look forward to a property built to modern standards, in a location that suits you, and often to your own design. And for these reasons, it’s vital you have the right cover.

We understand both the financial and personal investment that goes into a new-build project, so our policy keeps you covered from risks such as flood, fire, or theft of materials. Unlike new-build home insurance – which covers you once you’re living in the home and the works are signed off  – our insurance lasts throughout the construction phase, from when you first buy your plot to when it’s ready for moving in.

What insurance will I need for a new home?

  • A Warranty – A new home should come with a warranty. This should cover you against any defects or structural problems with your home for up to 10 years. The warranty only covers problems that are the builder’s fault. You need to have your own insurance in place to cover you for everything else. Find out more in our guide to New Home Warranties.
  • Insurance – You need buildings insurance to protect you in the event of fire, flood or subsidence. It will also cover any structural issues that the new home warranty doesn’t allow for. A mortgage lender will also require that you have insurance in place from the moment you exchange contracts. This is to make sure that their stake in your home is protected.
  • Contents Insurance – You should also get a contents insurance policy. This protects everything in your home in the event of anything from a fire to a burglary.

Problems with new build warranties

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Many people are attracted to new properties because of the warranty they come with. On paper, a new warranty protects you from any defects in your for the first two years and structural problems for up to ten years. 

The problem is what the warranty says, and what the developer is prepared to do can be very different. We regularly hear stories from members who are struggling to get the builder to come back and fix faults. One thing you can do to help get your voice heard gets a snagging survey before you move in. This involves professionals looking around your new build home and making a snagging list. They will then help liaise with the developer and help drive through problems with your builder on your behalf.

Are new homes cheaper to insure?

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The good news is yes, new builds are often cheaper to insure than older properties. This is because they are usually built with the latest, most secure doors and windows. This often attracts a discount from insurers as your home will be harder to break into.

One thing to consider when insuring a new home is the rebuild value. This is how much the insurance company would have to pay out to have your home rebuilt if the worst happened. Many people put down the price they paid for their home, but this means you are massively overdoing it. The amount you paid for your property includes the cost of building it, but also the desirability of the home, supply, and demand in the area, and amenities in the local area.

The simple cost of rebuilding your home is usually quite a bit less than the market value. The Association of British Insurers has a great calculator to help you work out the rebuild value of your home.

Three reasons to have insurance for your new home:

1. It offers cover not provided with a Buildmark warranty

While your Buildmark warranty (see below) provides useful cover for any structural issues which stem back to the way your new home was built, it will not cover damage caused by events such as fire, flooding or subsidence.

2. You will be protected for the full value of rebuilding your property should the worst happen

Buildings insurance protects you for the rebuild cost of your home, rather than your home’s market value. It will cover issues relating to your roof, walls, ceilings, and floors, as well as fixtures and fittings, including doors and windows, your kitchen, and even built-in cupboards and bathroom suites.

3. Your investment is secured

The right insurance policy will enable you to claim for damage caused by events such as storms, floods, subsidence, fires, gas explosions, vandalism, falling trees - or even a car hitting the building. 

What is excluded from most home insurance?

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You can buy combined contents policies, but you might still have to pay a separate excess for each part of the policy. For example, if a flood meant your property needed redecorating and many of your possessions had to be replaced, you might have to pay an excess on the building work as well as the new items.

  • You can’t claim for wear and tear or for general maintenance of your property.
  • Acts of terrorism are not covered.
  • Any claims you make after leaving your home unoccupied for longer than the period specified in your policy – typically 30 days.
  • If you sub-let your home and your belongings are stolen without forced entry.
  • If you work from home your business equipment is likely to be excluded unless you arrange separate cover or pay an additional premium.

If you’re looking for an expert home builder, Get in touch with us now! Visit Property Contractors 247 and get a free quote.

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