Insuring your home under construction

Insuring your property whilst work is taking place is made more complicated if you are not living on site. Insurers take the view that there is more risk, as there is less security, and you are not there to take care of any incidents.  It is not just burglars that are the problem - often we hear of fires which are started through the use of angle grinders.  Sparks land on materials and can smoulder for hours - flaring up when the site is unmanned.  Sometimes entire houses burn down, which if people had been living there, would probably not happen.  We have run sites which were stripped by thieves overnight - hoardings have been removed, windows taken out and smashed, doors pulled off, and in one case, every internal door smashed to pieces.  If the site was occupied, this would probably have been avoided.  Any form of security is better than none, but there is nothing to compare with occupation.  Do remember that if you are living in a caravan on site, this may still not meet the requirements of the insurer that the building is 'occupied'.  We have sites where our guys live permanently on the property - working in shifts - but the owners are still not able to achieve 'occupied' insurance, and the premiums are a lot higher.

In short, the quicker you can get the building to a lock-up state which allows you to move in, even if living with orange boxes, the better.

Insuring work to an extensions are generally a little easier, because you will normally be living in the home whilst you are extending it.  If you are renovating or restoring, insurance is difficult to arrange, because it is assumed you will not be on the premises all the time.

Older properties often do not meet specification as a dream home, and certainly would not meet many modern building regulations.  Finding an insurer who understands these challenges is difficult.  With the current state of the housing market, improving or adding to homes is becoming more popular.  Many Listed Buildings are in a terrible state, having been subjected to years of inappropriate repairs.  You need an insurance company that fully understands these issues. 

Some insurers only offer fire cover, which is insufficient for a lender's requirements - theft from active sites is a real problem - we often encounter examples where newly installed lead flashings have been torn off the roof overnight.  You need to understand thses risks, and work with an insurer who can help and advise the best approach.  You may need public liability cover to ensure that if a contractor injures themselves whilst working on your property, you cannot be held responsible.  You should always make sure that any contractor has their own Public Liability Insurance, preferably for at least £2.5 million in cover.

Many people engage a Main Contractor to project manage and undertake restoration.  This can be quite expensive - so some people elect to self-manage the project alone or with the help of their architect. If you opt to self-manage your restoration project, you will need to insure not only the existing structure but also the works in progress.   

Cover for Reinstatement cost:

You should make sure cover allows for the use of appropriate materials if the property is listed.  English Heritage point out that rebuild costs are often greater if Listed properties are damaged, and you are legally required to repair or replace 'As Was', in Like for Like condition. If more than 40% of the building has survived, it is likely, according to English Heritage, that this will be the case.  Rebuild Costs vary enormously.  A brick built structure, with owner builder supervision can be as low as £900 per square metre, but a burned out thatched cottage could cost upwards of £2500 per square metre.  It is important to make sure your building is properly covered, otherwise you may well be penalised if an insurance claim is made and you are found to be under insured.  We can help with estimating rebuild costs as part of our Building Survey if needed.

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