Self-build home insurance

What is self-build home insurance?

Building your own home is exciting and rewarding. But it’s a big undertaking that comes with a fair share of risk. You’ll be investing thousands of pounds into the project. So you should be sure you’re protecting your investment carefully by having the right insurance in place.

Self-build insurance - sometimes called new build insurance or project insurance - covers you for all sorts of problems that could affect your building work and lose you money. Things like damage to the structure or fixtures and fittings while your home is being built, theft of materials from the site, vandalism, injuries to people on the plot, delays to the construction work, plus unforeseen events like fires and floods that damage or destroy the build.

How does it work?

Self-build insurance protects you against the risks that come with building a home, ensuring you’re not left out of pocket.

You can take out self-build insurance from the moment you buy your plot and it’s designed to last until the completion of your build.

Policies typically last for up to 18 or 24 months covering the entire building process, but shorter options are available.

And if your building project is taking longer than expected you can ask your insurer to extend your cover. Many will allow you to do this by up to three years or even a month at a time.

Where can I buy it?

Most standard home insurance providers won’t offer self-build cover.

Instead, there are plenty of specialist self-build insurers that can help. You can find these by searching online or asking your contractor if they can recommend a provider. Always make sure that you compare quotes even if options are limited.

Do I need it?

Building sites can be risky, dangerous places, which makes self-build insurance one of the most important things to consider when you’re planning a homebuilding project.

The moment you buy your plot you’re responsible for it - so if anyone injures themselves on your land, whether they’re supposed to be there or not, they can claim against you.

Expensive tools and materials kept on site can increase the risk of theft. And dangerous working environments like scaffolding and rooftops could result in accidents.

Plus, while it’s being constructed, your new home may be more vulnerable to the elements and more likely to be damaged by fires, storms and flooding.

Having self-build insurance in place will protect you against risks like these and provide financial protection if something goes wrong.

Do I need it for renovations?

Whether you’re planning to build an extension or complete a loft conversion, you’ll need to let your insurer know and check whether they’ll still cover you.

Some policies will allow cover for things like having a new kitchen or bathroom fitted. But anything more major may not be covered because of the increased risk of something happening to your home and contents while building work is underway.

If you go ahead on a big renovation without telling your insurer and something happened to your home or contents during the work, your policy could be void.

Usually, with a big project like an extension, conservatory or loft conversion, you’ll need to take out specialist insurance, like renovation insurance or building works cover, to make sure your home is still protected while the work is taking place.

What’s covered with self-build insurance?

It depends on the particular policy. But you can expect self-build insurance to cover:

• Damage to the build materials, fixtures and fittings due to things like flooding, lightning, explosion, fire and vandalism
• On-site theft of materials, tools or equipment
• Public liability insurance which pays for legal costs and compensation if someone is killed or injured on your self-build site, or a third party’s property is damaged
• Employers’ liability insurance in case someone you employ is killed or injured while working on your site
• Contract works cover pays for the cost of repairing or replacing the structure of your self-build in the event of damage or destruction
• Legal expenses incurred in the event of disputes between you and your builders, for example

Make sure you read the small print of your policy to check it covers everything you need it to.

Without the right cover, it’s not just damage to your plot and part-finished home you’ll need to worry about - you could face legal action if someone on-site suffers injuries or losses.

What else might it include?

More comprehensive policies may offer cover (or the option to add cover) for:

• Site caravans and portacabins
• Hired plant and tools
• Accidental damage
• Subsidence
• Non-negligent liability - (also known as Joint Contracts Tribunal Clause 21.2.1 Insurance) protects you against damage to surrounding properties caused by your building work

What’s not covered?

Read your policy documents to check exactly what’s excluded before you start building.

In general, self-build policies typically won’t cover you for things like:

• Using biological or chemical materials in the build
• Damage that exists before the policy is taken out
• Deliberate damage caused by you, a family member, or your contractor
• Damage caused by wear and tear
• Vermin and insects
• Mechanical or electrical failure
• Damage caused by storms or flood to moveable property left in the open
• Damage caused by faulty workmanship and defective design
• Theft of property left in the open

How much does it cost?

This will depend on your particular project.

Factors like the materials you’re using, the type of build, how long the project is expected to last and the overall costs will all affect the price of your policy.

How comprehensive your cover is, plus what optional extras you choose to add on will also influence the price.

It’s always best to shop around and compare quotes.

When to buy self-build home insurance

It’s wise to take out insurance as soon you’ve bought a plot of land to build on, to ensure you’re covered for liability, even before the work starts.

If you have a mortgage, then it may be a condition that you show proof of having self-build insurance in place before they release funds.

Do builders have their own insurance during work?

Your builders should have their own insurance policy and it’s good practice to check and see what it covers before they start work.

But be aware that their insurance will typically only protect their interests, like covering them for negligence claims. It won’t look after your interests and the project as a whole.

For example, it won’t give you any liability cover before the work starts or provide you with any protection when the builders aren’t on site.

Similarly, it won’t cover your property, materials or equipment if they’re stolen or damaged by fire or storms.

At the end of the day, this is your project, so it’s wise to cover every eventuality with your own insurance in place.

How to stay protected during a self-build project

• Get cover in place as soon as you buy a plot - from the moment you own it, you’re liable for any damage that occurs on the site, and for injury to people that visit it. Michael Holmes, property expert for The London Homebuilding and Renovating Show, says, “You can reduce the chance of any claim by properly fencing and securing the site, and making sure health and safety signage is in place.”
• Don’t rely on your builder’s insurance. It won’t cover the whole project, or damage to your property and injuries sustained by people visiting the site.
• Make sure your self-build insurance includes cover for important things like public liability, employers’ liability and legal costs. It should also protect things that’ll cost a lot to replace - like machinery and tools, portacabins and caravans on site, as well as cover for materials and the structure itself.
• Buy a self-build structural warranty. It typically covers the structure for 10 years against defective design and faulty workmanship and will pay for corrective work if necessary. It can also include the cost of chasing any of your contractors for negligence if the work on your home was poorly done.
• Take out the right cover for unique self-builds. If you’re using glass, concrete or another unusual material to create your home, you’ll need a policy that covers non-standard construction.