Insurance & Structural Warranty – getting the right cover in place
Embarking on a building, conversion or renovation project is an exciting if not somewhat daunting experience at the best of times and there is clearly a considerable amount of planning and preparation to be put in place prior to getting started. Insurance is probably going to be the least exciting of the items on that schedule of tasks but giving it due consideration in plenty of time can literally save thousands of pounds both now and in the future should you need to make a claim.
Simon Middleton – December 2010
So what insurance should you be looking to purchase and when? The short answer is it depends on your individual project, but here is a quick overview of some of the areas you need to consider.
Unless you are using a main contractor for the whole build and there is a written contract in place between the parties stipulating that the contractor is responsible for the entire project until completed and handed over to you, then you will definitely need to consider Site Insurance and a 10 Year Structural Warranty.
Site Insurance, which is available from Self-Build Zone provides cover from the moment you exchange on a plot to the point it’s completed. The following provides a bench mark of what can be covered with Self-Build Zone and why you need it – but it’s worth remembering that not every insurer provides the same cover and your individual needs may be different, so if you want some expert advice call 0845 230 9874 or visit the website www.selfbuildzone.com.
The Claims service is what you are buying so remember to ask your supplier who is likely be sent to your site following a claim. Is the claims service specific to self-build? Some insurers use general ‘in house’ loss adjusters who may not have much experience in self-build.
If you are planning to remortgage or sell a newly built property at some point in the next 10 years you should consider purchasing a 10 year structural warranty as banks and building societies don’t like lending on properties that are not covered by an approved warranty like those available from Build-Zone NHBC and Premier. A structural warranty covers major damage caused by defects in design, workmanship or the materials used during the project and work differently to Architect Certificates which rely on you proving he professional was negligent which can be a costly and time consuming process. The provision of a Structural Warranty relies on regular inspections or technical audits being carried out during the course of construction. You should organise a warranty well in advance of the start of construction as insurers will want to inspect the footings, otherwise the premium can escalate quite severely. It’s also worth bearing in mind that many warranty providers can carry out Building Control for you (you don’t have to use the local authority) at the same time as doing the Technical Audits which can save you a fair bit in fees.
Insuring a project that has an element of existing structure involved is not always straightforward. Projects like barn conversions, renovations and extensions all have an existing structure either attached to or forming a part of the project, which needs to be covered in addition to the new works. Most standard home buildings policies will not provide cover while the property is undergoing alteration or renovation and they only provide cover for limited perils anyway – so if you inadvertently have a collapse while knocking a new opening through a wall, it will not be covered.
This is especially true when it comes to extensions. Home insurers tend to assume that you’re ‘builders’ will be fully insured and that any damage caused by them will be recoverable. However the onus is then on you to make sure the right cover is in place. If however you are carrying out the works as a self-builder the home insurer immediately has a problem as they cannot pursue their own policyholder in the event of a loss. Once the insurer is aware of this, it’s not unusual for the insurer to decline cover completely. It’s best to seek advice from a specialist.
How to get the best deal
- Purchase the cover when you exchange contracts. Waiting until your several months down the line will probably end up costing you more and cover like Legal Expenses may be limited.
- If there is an existing structure involved, make sure you have an accurate rebuilding cost for it rather than simply taking a guess.
- Purchase Site Insurance & Structural Warranty from one provider as a discount may be available.
- Don’t buy a shorter term policy unless you are absolutely sure your project won’t overrun – A longer term policy will work out cheaper in the end.
Site Insurance www.selfbuildzone.com 0845 230 9874
Self –Build Structural Warranty www.build-zone.com 0845 230 9874
Developer/Receiver Warranty www.build-zone.com 0845 230 9873