FREE Self-Build Insurance Advice
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Building your own home is an exciting project but also an expensive one that comes with a lot of risks. With all of the costs involved in a self-build project, insurance is likely to be the last thing on your mind. However, you need to protect yourself, the contractors, the building site and the building itself throughout the project. To do this, you need a specialist type of insurance that provides the right protection for your investment at this stage.
Self-build insurance gives you essential financial cover for all manner of issues while your home is being built. These can include injuries on site, unexpected delays with the construction, vandalism, theft from the site, structural damage during your home’s construction, damage to the fixtures and fittings as well as damage or destruction caused by unexpected events, such as flooding or fire.
What is self-build insurance?
Self-build insurance provides essential cover when building your own home. This applies whether you’re handling the construction work yourself or using contractors. It can also provide cover if you want to extend, renovate or convert your existing property. A self-build project is a significant investment and one that needs to be protected. On building sites, things can and do go wrong and having self build insurance in place means that you won’t be left severely out of pocket should the unexpected happen. This specialist insurance provides financial protection against damage or injury caused during the construction process. It covers you, the contractors, the site and the home that you’re building.
How does self-build insurance work?
Self-build insurance provides protection while your home is under construction. When you’re building from scratch, the building has to be insured while it is constructed. If you’re starting with an existing structure with plans to demolish some of it, the structure needs to be insured. You can arrange your self-build insurance as soon as you have a plot of land to build on. This covers your self-build site before any construction work commences.
Self-build insurance policies generally last up to 18 or 24 months. If you haven’t finished building your home at that point, you can ask for your cover to be extended. Shorter lengths of cover are also available, if you prefer, such as 3, 6, 9 or 12 months. Your policy will provide cover from the point you’ve bought the land until the construction process has been completed. At that point, a standard home insurance policy will be needed.
Types of self-build insurance
Particular types of self-build home insurance are needed at different stages of your project. These include public liability insurance, site insurance and a structural warranty.
Public liability insurance
Once you’ve bought a plot of land to build your home on, you immediately become liable for injuries or accidental death to anyone who steps foot on your land. This is regardless of whether or not they were supposed to be there. Public liability insurance provides financial protection for this. It also covers you throughout the construction process and stays in place until the construction work has finished. As well as covering you against injuries or accidental death to people on your site, it protects against damage caused to their property. Your legal fees will be paid as well as any repair costs, compensation and medical fees that you may be liable for up to a certain amount.
You can take out public liability insurance as separate cover before any building work starts. If you prefer, you can take out a complete self build insurance package from the start as most self-build insurance policies include public liability cover as standard.
Site insurance
Once you’ve got planning permission and building regulations consent, you can proceed with your self-build project. At this stage, you’ll need to upgrade to self-build site insurance. This also provides cover if you’re renovating, extending or converting your existing property. It offers financial protection against injury or accidental death to people on your site during the construction process as well as damage to their property. It also covers damage or injuries caused outside your site as a result of the construction work. The new build work and materials are covered as well as any existing and temporary structures and the plant, tools and equipment used. Self build site insurance ensures that your legal fees, repair costs, medical fees and compensation costs are paid up to a certain amount.
It’s important to make sure that the sum insured is right. Unexpected issues can and do occur on self-build sites and they can be incredibly expensive to rectify. You need to ensure that if the worst happened, the payout from the insurer in the event of a claim would cover the entire cost to rectify the damage done and reinstate the work so that you can complete your build. Our mortgage and protection brokers work closely with self-build insurance providers to help you ascertain the correct amount. That way, you can be confident that the sum insured is adequate for your project, giving you the financial protection you need.
Structural warranty
A self-build structural warranty covers your new home after construction has finished. It provides financial protection for any defects that are found as the result of the design, materials or workmanship. These defects often go unnoticed during the build but can become apparent years later. As such, a structural warranty will come into effect once the build has finished and is usually valid for up to 10 years. Having a structural warranty in place, therefore, ensures that you don’t end up facing huge expenses after your home has been built due to problems that were caused during the build process.
If you’re using a self-build mortgage to finance your project, the lender will require you to have a structural warranty in place. This reduces their level of risk and usually needs to be in place before they offer you the funds.
When selling your self-build home during the warranty period, the cover will be transferred to the new owner. This will give them peace of mind that any defects that arise are covered under the structural warranty and can be rectified accordingly.
What does self-build insurance cover?
Self-build insurance policies offer different levels of cover but you need to ensure that you have adequate protection in place both before the build starts and for every stage of the construction process. Below, we’ve detailed the standard cover you should include in your self-build insurance policy.
Public liability
This provides cover if your self-build project is responsible for causing injury or accidental death to a member of the public or for damage caused to a third party’s property. Public liability insurance covers your legal fees, medical fees, repair costs and any compensation that you’re liable for. You should have public liability insurance in place as soon as you own the land and before any work commences. You’ll be able to change to a full self-build insurance policy once you’re ready to start construction. Your public liability cover will remain in place throughout the project until the construction work has been completed.
Contract works
This covers the costs of repairing or replacing the structure while it’s being built. Damage to or destruction of the structure during the build can be extremely costly. The delays to your self-build build project as a result of this make it even more so. Contract works cover stays in place until the construction work has finished.
Employer’s liability
This is a legal requirement to cover anyone who is working on your site. It covers you in the event that anyone working on your site becomes injured or is accidentally killed.
Theft
This covers the theft of any tools, materials and equipment from your build site.
Your own and hired-in equipment, tools and plant
This covers the costs of replacing your personal belongings and those of your employees that are kept on-site during the build. It also covers the costs of repairing or replacing an owned plant or a hired-in plant if damaged. For the latter, any hire charges will also be covered.
Temporary buildings
If damage is caused to any on-site temporary buildings, the costs to repair or replace them will be covered. These can include site huts and a residential caravan, for example.
Legal expenses
This covers the legal costs relating to contractual disputes. These disputes can arise with builders, architects, suppliers, surveyors and the local authority, for example. Legal expenses can escalate quickly so it’s important to have this aspect covered should a dispute arise.
Optional add-ons for your self-build insurance
Some self-build insurance policies include the following cover but, if not, they can be added to your policy:
- Personal accident. If you have an accident during the construction phase, your medical expenses will be covered.
- Non-negligence cover. This provides protection should any accidental damage be caused to surrounding properties by your self-build site. It also covers remedial works needed to rectify unanticipated issues, such as subsidence.
Structural warranty
As your self-build site insurance cover ends once construction has been completed and your project has been signed off, an optional insurance to consider is a structural warranty. This self-build warranty is highly recommended as it covers your home once it has been built. A structural warranty usually lasts for up to 10 years, giving you peace of mind that you won’t be faced with huge expenses for any damage that may have been caused during the build process. This damage may be due to the materials used, bad workmanship or a poor design, for example. If you decide to sell your self-build home in the future, the structural warranty will reassure the buyer that financial protection is in place. As mentioned earlier, a lender will expect you to have a structural warranty in place if you’ve applied for a self-build mortgage.
What is not covered with self-build insurance?
As with the inclusions, self-build insurance policies offered by different providers have varying exclusions. Generally, the following issues won’t be covered in a self-build insurance policy:
- Wear and tear
- Vermin infestations
- Existing damage before the policy has been taken out
- Deliberate damage, whether caused by you or your contractors
- Extreme weather damage caused by floods or storms
- Electrical or mechanical failure
Get expert advice from a self-build mortgage and protection broker
Our mortgage and protection brokers are ready to discuss your self-build project to help ascertain the level of cover needed. Whilst policies generally include standard types of cover, each provider has its own standard inclusions, optional extras and exclusions. Our brokers – located throughout Kent, London and Edinburgh – will scrutinise the cover to ensure that you have the right level in place. They will make sure that you’re fully aware of all inclusions and any exclusions before your policy commences. To discuss your project and get a self-build insurance quote, give us a call on 01322 907 000. If you prefer, send an email to us at info@trinityfinance.co.uk or an enquiry via our contact form.
At Trinity Finance, we can also arrange your self-build mortgage if you require funding for your project. Different from a standard residential mortgage, the funds will be released to you in stages throughout your project. This helps to ensure that you stay on track and within budget. Having formed good relationships with self-build mortgage lenders and with access to exclusive deals, we can find the best one to suit your circumstances and funding requirements. Lenders expect self-build insurance to be in place before they will release any funds. Therefore, our mortgage and protection brokers will ensure that this has been arranged to satisfy their requirements.
How much will your self-build insurance cost?
Each self-build project is different and the cost of your self-build home insurance will depend on various factors. These include the type of home you’re building, the expected construction costs, the materials to be used, the location, what types of cover you want included in your policy and the level of risk involved. For the latter, different aspects can affect how risky your project is.
For example, the longer you expect the project to take, the higher the risk of issues occurring, which will increase the cost. The more contractors you employ to work on your site, the more protection is needed. Likewise, the more extensive your project and the more equipment used, the higher the chances of something going wrong. The property value will also affect the self-build insurance cost. This is because a higher property value will cost the insurer more in the event of a claim than a lower value.
Our mortgage and protection brokers will go through every aspect with you in detail. This will enable them to give you an accurate cost for your self-build insurance policy, which will be specifically tailored to meet your needs. That way, you can have peace of mind that the right amount of protection is in place should anything unforeseen happen.
Do you need self-build insurance?
When embarking on a self-build project, you’re investing a lot of money into it. It’s an exciting project to carry out but things can and do go wrong on building sites so you need to ensure that your investment is protected. Your liability begins as soon as you’ve bought a plot of land and continues until the build has been finished.
Accidental injuries, or worse, can easily happen on a building site. The theft of tools, materials and equipment that are left on site can also occur. And your home can be damaged or even destroyed during the construction process. Therefore, it’s essential to financially protect yourself as well as the property you’re building, the site and those working on your site. Whilst your architect and contractors may have their own insurance, this won’t adequately cover you. As it’s your build site, they’re considered to be your employees and, as such, your responsibility.
A single mishap at any stage could jeopardise your entire project. Without self-build insurance in place, the financial implications could be overwhelming. Whilst having an insurance policy is another expense, it’s one that you really can’t afford to leave out.
When should you take out self-build insurance?
You should take out this insurance as soon as you’ve bought your plot of land. This is because your liability starts from that point, not from the point that construction work begins. If someone steps foot on your land – regardless of whether they’re meant to be on it or not – and gets injured, you’re legally liable.
If you’re applying for a self-build mortgage to finance your project, the lender will expect you to have self-build insurance in place before providing you with any funds.
Put financial protection in place for your self-build project
Before embarking on any stage of your self-build project, speak with one of our mortgage and protection advisers about the financial protection you should have in place. They’ll advise you on the different types of self-build insurance available and the stages they’re needed for. You can take these out as separate policies or together as a complete package if you prefer. Self-build insurance cover can be put in place whether you’re building a home from the ground up or extending, converting or renovating your existing home. This specialist cover is also available for more complex projects, such as unusual build types or those with a non-standard construction.
At Trinity Finance, we understand the risks involved with a self-build project. Your project details will be discussed in detail so that your policy can be tailored to meet the specifications of your project. If you need funding for your project, we can arrange your self-build mortgage and ensure that your insurance is in place to satisfy the lender’s requirements. Once your home has been completed and you’re ready to move in, we can arrange your standard home insurance policy for you. Having spent all of that time, money and effort on your self-build project, it’s important to protect your investment.
A tailored solution to meet your needs
For full details of the self-build mortgage and insurance products we offer, just give us a call on 01322 907 000. We work closely with specialist lenders and insurers providing these niche products. As your self-build project will be unique, there’s no one-size-fits-all solution for a mortgage deal or an insurance policy. Each one will be specifically tailored to suit your project requirements. If you’re unable to speak with one of our expert self-build brokers by phone, email your details to us at info@trinityfinance.co.uk. Alternatively, send them to us via our contact form. We will reply to you as quickly as possible with more information.
FAQs
Can you arrange self-build insurance when you’re not sure when the work will start?
Yes, as soon as you’ve purchased a plot of land, you should put public liability insurance in place. This covers your site before any work commences and can be taken out as separate cover to self build site insurance. When you’re ready to start the work, you can upgrade to include site insurance.
If you know when the work will start, you may prefer to have a complete self-build insurance package from the start. This is because self-build insurance policies usually include public liability cover as standard so it will be easier to arrange than separate cover.
Is your self-build insurance cover still valid once you’ve finished building your home?
Self-build insurance is designed to provide cover while your home is being built. Therefore, when construction has finished and the project has been signed off, your public liability and site cover will end. The exception is a structural warranty — this type of cover usually lasts for up to 10 years. The structural warranty will cover the costs of works needed as a result of issues that were originally caused during the build. To protect your home and its contents once it has been built, you’ll need to take out standard home insurance.
How long is a self-build insurance policy valid for?
Generally, self-build insurance policies last for up to 18 or 24 months. If you already have a project schedule, this can help you to decide the length of policy to choose. If you don’t think this length of time will be necessary to finish the build, shorter amounts of cover are also available, such as 3, 6, 9 or 12 months. If construction hasn’t finished by the time the initial policy period is due to end, your cover can be extended. You can usually extend your cover by up to 3 years.
Is your self-build insurance still valid if you live on the site during the build?
Yes, many people who decide to build their own homes live on the site throughout the project. Self-build insurance can cover temporary buildings too, such as site huts or a residential caravan.
What other insurance do you need for your self-build home?
A structural warranty is recommended as part of your self-build insurance. This provides financial protection for any defects that come to light after the build has finished. It covers you for any damage that has to be rectified as a result of bad workmanship, the materials used or a poor design. A self-build warranty usually lasts for up to 10 years.
Whilst this covers you for defects as a direct result of the build, it doesn’t provide cover for any damage or destruction caused to your home and its contents as a result of unexpected events once it has been built. Examples of these events are vandalism and theft, explosions, fire damage, burst or frozen pipes and storm damage, among others. For this type of protection, you need buildings and contents insurance. Buildings insurance covers the structure of your property and its fixtures. Contents insurance covers all of your belongings in your home. You can take out these policies separately or as a combined home insurance policy.
Another factor to bear in mind is what will happen to your self-build project if you’re incapacitated during the build. Different types of cover are available, providing financial protection for you and/or your beneficiaries should you suffer from a serious illness, become severely injured or die. These types of insurance cover will ensure that your self-build project can be completed and any funds borrowed can be repaid.
Do all insurance providers offer self-build insurance?
No, self-build insurance is a specialist type of cover and, as such, isn’t offered by most standard insurance providers. Our mortgage and protection advisers know which specialist insurance providers offer this niche cover. They will compare the level of cover provided by each as well as the costs to ensure that you make the best decision for your self-build project.
If you’re employing a team of builders, won’t they have their own insurance?
You may be wondering if there’s any need to take out self-build insurance if your builders already have their own insurance in place. Whilst any contractors working on your site are likely to have their own insurance cover, this will typically only cover their liabilities, not yours. Without having your own insurance, you’re putting yourself at risk.
You become liable as soon as you’ve purchased a plot of land and before any building work commences. Your site also needs to be covered even when the contractors have finished working and left the site each day. As the self-build project is yours, you need to fully protect yourself against any eventuality. The right self-build insurance cover provides you with complete financial protection should you need it.
Can you extend your self-build insurance policy?
Things don’t always go to plan and your self-build project may take a lot longer than you anticipated. If the initial policy period is coming to an end and you’re still in the construction phase, you can ask for your cover to be extended. You may prefer to do this on a month-by-month basis if you’re near the end. But most insurers will allow you to extend your self-build insurance policy by up to 3 years.
Do you need self-build insurance for renovations?
This depends on the type of work you’re planning to carry out and the terms of your current insurance policy. Some renovation work, such as fitting a new bathroom or kitchen, will more than likely be covered under your existing policy. However, for more extensive projects, such as a loft conversion or building an extension, you may need to take out self-build insurance. This is because the building work needed for a bigger project increases the risk of damage to your home. If you don’t check with your insurer before proceeding with the work and something goes wrong, you may find out that your policy is void. If this happens, you may be left severely out of pocket having to pay to rectify the damage.