Do you need new build home insurance?
Posted 15 January 2016 by Keith Osborne
Every sensible homeowner is well aware of the need to ensure that they have adequate contents and buildings insurance. But when purchasing a new build, do you need the same level of cover for buildings insurance? Or is this already taken care of with guarantee schemes like Buildmark? And do you need specialist home insurance for a policy specifically aimed at purchasers of new builds?
Having inadequate insurance, none at all, or an invalid policy could prove to be extremely costly, so it's essential to make sure that you have the appropriate level of cover and a policy that will pay out should you need it.
Schemes such as Buildmark, the warranty provided by the National House Building council (NHBC), give buyers of new build properties the confidence that any structural issues will be dealt with during the first ten years after the home is built (a significant proportion of buyers find problems early on with their new build even if proper "snagging" has been carried out).
However, their scope is limited. They do not cover accidental damage, or damage caused by weather. With the floods of 2015, we have seen how important it is to have adequate insurance. It is also essential to have contents insurance in case of flood or theft.
One extra that you may want to get is legal insurance specially for a new build, in case you have a dispute with the builder.
Be sure, however, that you are not over-insured and doubling up on cover. If your property is leasehold, check with the owner of the freehold - they may already have buildings insurance cover. Most flats are leasehold, and most houses are freehold, although there are exceptions to both.
Also, a new build insurance policy normally does not cover any structural problems that show up during the first two years after the home is built. Such problems would be covered under the Buildmark guarantee. Therefore you should be able to find competitively priced policies, as new builds are a better risk for insurance companies.
So while you are not obliged to purchase a policy designed for new builds, there are advantages to choosing new build home insurance. And if you were to choose the self-build route, you would definitely need a specialist policy.