What is New Build Insurance Before Completion?
What is New Build Insurance Before Completion?
New build insurance before completion is a specialist policy designed to protect your financial interest in a property that is still under construction. Unlike standard home insurance, which usually starts once you legally own and occupy the home, this type of insurance covers the period before completion – when your new house is being built but ownership hasn’t yet been transferred to you.
During the construction phase, there are several risks that could threaten your investment. These include events like fire, theft of building materials, vandalism, storm damage, or accidental incidents that could delay or increase the cost of your build. New build insurance before completion is designed to safeguard you against such unforeseen circumstances, ensuring that you are not left out of pocket if something goes wrong before you move in.
Typically, this insurance covers:
Fire and explosion: Protection against accidental fires or explosions on the construction site.
Theft and vandalism: Cover for stolen materials or deliberate damage to the property.
Accidental damage: Protection if part of the structure or materials are accidentally damaged during the build.
Storm and flood: Cover for severe weather events that could damage the unfinished property.
Legal liability: If someone is injured on site and you are found legally responsible, some policies include liability cover.
It’s important to note that while your builder or developer should have their own insurance, their policy might not fully protect your interests as the future homeowner. For example, their insurance may only cover their materials or liabilities, not your deposit or the value of the work completed so far. Having your own new build insurance before completion gives you peace of mind that your financial stake is protected.
This type of insurance is especially important if you’ve paid a deposit, if you’re buying off-plan, or if you have a contract that makes you responsible for the property before completion. It can also be a lender requirement if you are using a mortgage to fund your purchase.
Once your home is finished and you take legal ownership, you’ll need to arrange standard building and home insurance to continue protecting your property. Understanding the difference between these types of cover ensures you’re not left exposed at any stage of your home-buying journey.
Why You Need New Build Insurance Before Completion
When you’re building a new home, it’s easy to focus on the excitement of design choices and moving in. However, the period before completion is also when your investment is most vulnerable. Having new build insurance in place before your home is finished is not just a wise precaution – it’s often a legal and financial necessity.
Risks During Construction
Construction sites are exposed to a range of risks that can lead to costly setbacks. Without insurance, you could be left out of pocket if your new home suffers from fire, flood, theft of materials, vandalism, or accidental damage. Even well-managed projects can encounter unexpected problems, such as structural issues or severe weather events. If something goes wrong, the financial impact can be significant, potentially delaying completion or forcing you to pay for repairs yourself.
Legal and Financial Protection
New build insurance (sometimes called “buildings insurance” or “construction insurance”) is crucial for protecting your legal and financial interests. In the UK, while there’s no law requiring new build insurance before completion, most mortgage lenders will insist on it as a condition of releasing funds. This is because the lender wants to safeguard their investment as much as you do. If the property is damaged or destroyed before you move in, insurance ensures there’s cover for repairs or rebuilding, rather than leaving you (and your lender) at risk.
How Insurance Protects You
With the right insurance policy, you’re protected against a wide range of potential losses during the build phase. This can include:
Damage to the structure: Fire, storms, or accidental damage can halt a project. Insurance covers repair or rebuilding costs.
Theft or vandalism: Construction sites are common targets for theft of tools and materials. Insurance can help recover these losses.
Liability: If someone is injured on-site, you could be held responsible. Insurance often includes public liability cover.
Without this protection, any of these issues could lead to serious financial strain or even legal action.
Meeting Mortgage and Lender Requirements
Most UK mortgage providers require proof of buildings insurance before they will release the final stage payment for a new build. This is because the lender’s security is tied up in the property itself, and they need assurance that its value is protected from day one. Failing to arrange insurance can result in delays to your mortgage completion or, in some cases, the withdrawal of your mortgage offer altogether.
Planning Ahead
Securing insurance before completion should be a key step in your home-buying process. It’s important to check the terms of your policy to ensure it covers the construction phase, not just after you move in. Some policies have specific requirements or exclusions for new builds, so read the fine print carefully and ask your solicitor or insurance provider for guidance if you’re unsure.
To understand the wider legal and financial steps involved in buying a home, including the importance of insurance at each stage, it’s helpful to review the overall process. Taking these precautions early helps protect your investment and gives you peace of mind as your new home takes shape.
What Does New Build Insurance Cover?
What Does New Build Insurance Cover?
New build insurance before completion is designed to protect your investment during the construction phase of your new home. This type of insurance, sometimes called “buildings during construction” or “contract works” insurance, covers a range of risks that could otherwise leave homeowners facing significant costs if something goes wrong before you move in.
Typical Risks Covered
During construction, your new home is vulnerable to a variety of risks. New build insurance typically covers:
Fire: If a fire damages the structure or materials on site, your insurance can help cover the cost of repairs or replacement.
Theft: Construction sites can be targets for theft. Insurance usually covers stolen building materials, tools, and fixtures.
Vandalism: Damage caused intentionally by others, such as graffiti or broken windows, is generally included.
Storm Damage: Severe weather, including high winds, heavy rain, or flooding, can cause significant damage to partially built homes.
Accidental Damage: Mistakes can happen on site, such as dropped materials or accidental breakages. For more detail on what is included under accidental damage, see the Essential Guide to New Build Insurance Before Completion | Contend Legal.
Coverage for Materials and Fixtures
One of the key benefits of new build insurance is that it usually covers not just the structure itself, but also materials and fixtures stored on site before completion. For example, if windows, doors, or kitchen units are delivered in advance and are damaged or stolen before they’re installed, your policy can help cover the cost to replace them.
Limitations and Exclusions
It’s important to be aware that new build insurance policies can have exclusions or limits. Common exclusions include:
Negligence: Damage caused by poor workmanship or failure to follow building regulations may not be covered.
Unattended Sites: If the site is left unsecured, losses due to theft or vandalism might not be covered.
Pre-existing Damage: Damage that occurred before the policy started is usually excluded.
Wear and Tear: General wear and tear or gradual deterioration isn’t typically covered.
Always read your policy documents carefully to understand exactly what is and isn’t included. If you have questions about specific scenarios, the Essential Guide to New Build Insurance Before Completion | Contend Legal provides a helpful overview of what to look out for.
Transition of Coverage After Completion
Once the build is finished and legal ownership of the property is transferred to you, the type of insurance you need will change. At this point, you’ll usually switch from new build insurance to standard home insurance, which covers the property as a completed and occupied home. Make sure there’s no gap in coverage during this transition to avoid being left unprotected.
Understanding what your new build insurance covers – and its limitations – can help you make informed decisions and protect your new home from unexpected setbacks during construction. For further details on common risks and how to secure your investment, visit the Essential Guide to New Build Insurance Before Completion | Contend Legal.
How to Get New Build Insurance Before Completion
Getting new build insurance before completion is an important step to protect your investment during the construction phase. Here’s a step-by-step guide on how to arrange this insurance, who can provide it, what information you’ll need, and tips for choosing the right policy.
Steps to Arrange Insurance Before Completion
Check Your Contract and Lender Requirements
Before you start, review your purchase contract and speak to your mortgage lender. Many lenders require you to have buildings insurance in place from the moment you exchange contracts, even if your new home isn’t finished yet.Identify Who Will Provide the Insurance
New build insurance can be arranged through several sources:Builders or Developers: Some developers include a structural warranty or insurance policy as part of the sale. However, this may only cover structural defects, not accidental damage or theft during construction.
Specialist Insurers: There are specialist insurers who offer policies tailored to new builds and self-build projects. These policies can provide more comprehensive coverage during the build phase.
Mortgage Lenders: Some lenders offer or require specific insurance products for new builds, so it’s worth checking their recommendations.
Gather the Required Information
When applying for new build insurance, you’ll typically need to provide:
The property address and postcode
Details of the builder or developer (including any warranties provided)
Estimated completion date
Value of the property upon completion
Construction details (such as materials used and any non-standard features)
Details of any existing cover or warranties
Request Quotes and Compare Policies
Contact several insurers or use a broker to gather quotes. Make sure to compare not only the price but also the level of cover, including:
Duration of cover (does it start from exchange of contracts?)
What is covered during the build (e.g., fire, flood, theft, vandalism)
Exclusions or limitations
Whether temporary accommodation is covered if there are delays
Check for Overlaps and Gaps
If your builder provides a warranty, check what it covers and for how long. You may still need separate insurance for risks not included in the warranty, such as accidental damage or theft before you move in.
Tips for Comparing Policies and Ensuring Adequate Coverage
Read the Policy Wording Carefully: Make sure you understand what is and isn’t covered, especially for events like fire, storm damage, or vandalism during the construction phase.
Look for Flexible Start Dates: Some policies allow you to set the start date for when you exchange contracts, which is often required by mortgage lenders.
Consider Additional Cover: If you’re carrying out any work yourself or using non-standard materials, inform the insurer to avoid potential disputes over claims.
Check Excesses and Limits: Review the policy excess (the amount you pay towards a claim) and the maximum payout limits to ensure they match your needs.
Consult Specialist Insurers: For complex builds or self-build projects, it’s wise to approach specialist insurers who understand the unique risks of new build properties.
Legal and Regulatory Considerations
In the UK, there’s no legal requirement to have buildings insurance before completion, but most mortgage lenders will insist on it as a condition of the loan. The Consumer Rights Act 2015 and Financial Conduct Authority (FCA) regulations require insurers to provide clear information about what is covered, so don’t hesitate to ask questions.
For a detailed breakdown of what to expect and what to look for in a policy, you can find more guidance from specialist insurers.
By following these steps and tips, you can ensure your new build is adequately protected before completion, giving you peace of mind as your new home takes shape. If you’re unsure about the right policy or need more detailed advice, consider speaking with an independent insurance broker or visiting the HomeOwners Alliance for more information.
After Completion: Transitioning to Standard Buildings Insurance
Once your new build is complete and ready for you to move in, it’s crucial to arrange standard buildings insurance to protect your property from day one. New build insurance (such as a structural warranty) typically covers defects or issues that arise during construction and for a set period afterwards, but it does not replace the need for comprehensive protection against everyday risks once the home is finished.
Why standard buildings insurance is essential
Standard buildings insurance safeguards your home against a range of risks, including fire, flood, storm damage, subsidence, vandalism, and accidental damage. Mortgage lenders almost always require you to have this cover in place from the day you legally complete the purchase – even if you aren’t moving in straight away. Without it, you could be left financially exposed if something goes wrong.
For a detailed breakdown of what this type of policy covers and how it works, see the Essential Guide to New Build Insurance Before Completion | Contend Legal. This guide explains how standard buildings insurance protects the structure of your home, including the walls, roof, and permanent fixtures.
How to switch from new build insurance to standard home insurance
When your new build is finished, the transition is usually straightforward:
Check your completion date: Arrange your buildings insurance policy to start on the day you legally complete the purchase – not when you move in. This ensures you are covered from the moment you become responsible for the property.
Inform your insurer: Let your chosen insurer know the property is a new build. They may ask for details about the property’s construction, warranty, and security features.
Overlap cover if needed: If your new build insurance overlaps with your new policy, confirm with both providers when each cover takes effect and what is included, to avoid any gaps.
Cancel temporary or builder-arranged cover: If your builder provided insurance during construction, make sure you understand when this ends and when your responsibility begins.
What does standard buildings insurance cover?
A typical policy covers the structure of your home – walls, roof, floors, windows, and permanent fixtures – against risks like:
Fire, smoke, and explosions
Flood and storm damage
Theft or attempted theft
Vandalism
Subsidence, heave, and landslip
Accidental damage (if included)
It usually does not cover contents (your belongings), so consider arranging contents insurance separately. For more on what’s included and your legal duties as a homeowner, visit our guide to home insurance.
Avoiding gaps in cover
It’s important to ensure there is no period where your new home isn’t insured. Set your new policy to begin as soon as you take legal ownership. If you’re unsure about the timing or what your new policy should include, our page on building and home insurance provides helpful next steps.
For further guidance on choosing the right insurance for your completed home and understanding your ongoing responsibilities, see our in-depth resource on home insurance.
By arranging the right cover at the right time, you’ll protect your investment and enjoy peace of mind in your new home.
Common Issues During Construction and How Insurance Helps
During the construction of a new build home, several issues can arise that put your investment at risk. Understanding these potential problems – and how new build insurance can help – will give you peace of mind throughout the building process.
Common Problems During Construction
Construction Delays: Delays are one of the most frequent challenges faced during a new build. Weather, supply shortages, or contractor issues can all push back your completion date, sometimes leaving you with extra costs or temporary accommodation needs.
Damage to the Property: Building sites are vulnerable to accidental damage. This might include fire, flooding, or structural issues caused by the work itself. Even a small incident can lead to costly repairs and further delays.
Theft or Vandalism: Expensive materials, tools, and appliances are often stored on-site before installation. Unfortunately, these can attract thieves or vandals, resulting in financial loss and setbacks to your build schedule.
How New Build Insurance Protects You
New build insurance is designed to cover many of these risks during the construction phase. Depending on your policy, you may be protected against:
Damage to the building works: If something happens to the structure before completion, your insurance can cover the cost of repairs.
Theft or loss of materials: Insurance can reimburse you for stolen or damaged items that are vital for your build.
Third-party liability: If someone is injured on your site or neighbouring properties are affected, liability cover can help with legal and compensation costs.
It’s important to check the details of your insurance policy, as coverage can vary. Some policies may also include protection for delays caused by insured events, helping with additional accommodation or storage costs.
Your Rights if There Are Disruptions or Damage
As a homeowner, you have legal rights if your build is disrupted or your property is damaged. Most new build contracts are governed by the Consumer Code for Home Builders or similar schemes, which set out standards for fair treatment and redress. If your builder fails to protect your property or causes unreasonable delays, you may be entitled to compensation or remedies under your contract or relevant consumer protection laws.
Seeking Compensation for Building Work Disruptions
If you experience significant disruptions, delays, or damage during construction, it’s essential to act promptly. Start by documenting the issue and notifying your builder and insurer in writing. Your insurance policy should outline how to make a claim and what evidence you’ll need.
If the builder is at fault, you may also have the right to seek compensation for building work disruptions. This can help recover costs for delays, damage, or any additional expenses you incur as a result of the disruption.
By understanding the common risks during construction and how new build insurance works, you can better protect your investment and know what steps to take if things don’t go to plan.
Special Considerations for Older Homeowners
When considering new build insurance before completion, older homeowners may face unique challenges and opportunities. Age can play a role in both the options available and the cost of insurance, so it’s important to understand how to secure the right protection for your new home.
How Age Affects Insurance Options and Premiums
Insurers sometimes view older homeowners as a higher risk group, particularly if health or mobility concerns could impact the upkeep or security of a property. This perception may influence both the availability of certain policies and the premiums charged. For example, some insurers may restrict the maximum age for new applicants or apply higher premiums to reflect perceived risks.
However, many providers now offer specialist insurance products designed for older people, recognising their specific needs and offering tailored cover. It’s worth noting that, legally, insurers cannot discriminate solely based on age under the Equality Act 2010, but they can take age into account if it’s a relevant factor for risk assessment and pricing.
Tips for Older Buyers Seeking Suitable Insurance
Shop Around: Don’t accept the first quote you receive. Compare policies from different insurers, including those who specialise in cover for older homeowners.
Look for Specialist Providers: Some insurers focus specifically on the needs of the over-50s or retirees, offering more flexible terms or additional benefits.
Be Honest About Your Circumstances: Accurately disclose your age and any relevant health or mobility issues. This ensures you’re properly covered and avoids problems if you need to make a claim.
Consider the Level of Cover: Make sure your policy covers the rebuild value of your new home during construction, as well as liability cover and protection for fixtures, fittings, and any personal possessions you plan to move in early.
Ask About Support Services: Some policies include extra services, such as 24-hour helplines or assistance with claims, which can be especially valuable for older homeowners.
Additional Protections and Advice
Older homeowners may benefit from additional protections, such as accidental damage cover or legal expenses insurance, which can help with disputes during or after the build. If you have specific health or accessibility needs, check whether your policy covers adaptations or specialist equipment.
It’s also wise to plan ahead for the transition from new build insurance to standard home insurance once your property is complete. Make sure there’s no gap in cover during this period.
For a more in-depth look at insurance options and considerations for older homeowners, see our age concern house insurance: a UK elderly guide, which provides practical advice and detailed guidance tailored to your needs.
By taking these steps, older buyers can secure comprehensive protection for their new build home, offering peace of mind both during and after the construction process.
Planning Home Improvements After Your New Build
When you move into your newly built home, you may start thinking about ways to personalise or improve your space. Whether it’s adding an extension, converting a loft, or upgrading your kitchen, it’s important to understand how your new build insurance fits into your future plans for home improvements.
How New Build Insurance Relates to Future Home Improvements
New build insurance, often known as structural warranty, typically covers defects in the structure of your home for a set period (usually 10 years). However, this cover may not automatically extend to any modifications or extensions you make after completion. Before starting any new project, check with your insurer to see if your policy covers work done after the original build, or if you need to update your insurance to include new improvements. Failing to notify your insurer about significant changes could risk invalidating your cover.
Permissions and Regulations: What You Need to Know
Before making any changes to your new build, it’s essential to understand the permissions and regulations that apply. Many home improvements – like extensions, structural alterations, or even certain landscaping projects – may require planning permission or building regulation approval. This is especially important for new builds, as your property may be subject to additional restrictions, such as covenants from the developer or conditions attached to the original planning consent.
For a detailed overview of what permissions you might need and the steps involved, visit our guide to home improvements. This resource explains the legal requirements and helps you avoid costly mistakes.
Financial Assistance for Home Improvements
If you’re considering upgrades to your new build, you might be eligible for financial support. Various home improvement grants are available in the UK, especially for projects that improve energy efficiency, accessibility, or safety. These grants can help cover the cost of insulation, heating upgrades, or adaptations for disabled residents. Always check the eligibility criteria and application process before starting work.
Ensuring Your Insurance Covers Modifications
Whenever you plan a significant change to your home, speak to your current insurer before work begins. You may need to update your policy or take out additional cover to protect against risks associated with building works, such as accidental damage or liability for injury. Keep records of all permissions, plans, and correspondence with your insurer, as this will help if you need to make a claim in the future.
By understanding how your new build insurance interacts with future improvements, staying on top of permissions and regulations, and exploring financial assistance options, you can protect your investment and enjoy your home for years to come. If you’re planning any changes, start by reading about home improvements and check if you qualify for home improvement grants.
