Posts Tagged ‘completed house structural warranty’
Raymond Connor of BuildStore Financial Services explains how the self build housing market, with new-found political support, is poised to become mainstream, and why lenders need to act now to benefit from high quality, low-risk lending in this sector.
Source: Mortgage Finance Gazette – 6th January 2011
Against the backdrop of a credit crunch, a recession, and a new government, the mortgage and housing markets have changed for good. With their weaknesses exposed, it is now time to consider the potential for new models of housing procurement, and the funding thereof. The so-called ‘good times’ of the late 1990s to mid-2000s will never come back. And yet, they are still being used as a gauge for current progress, creating an unrealistic picture of the market going forward.
Whether it’s a barn or a new town house you know it’s going to be a challenge when it comes to insurance! Simon Middleton is Director of Self-Build Zone, Renovation Zone and the Build Zone 10 Year Structural Warranty. Simon explores the different types of insurance on offer and tells us why he thinks insurance for some people can be the single most important product they purchase as part of their project.
It is difficult to find the right sort of insurance when embarking on a self-build or renovation project. Don’t just think that any high street insurance company can give you cover – they really can’t and in most cases haven’t got a clue what you actually need. In reality there are only a handful of suppliers able to provide you with the advice you actually need and the product that you are looking for.
When it comes to renovation projects Simon advises caution.
“In most cases the first type of insurance you might consider is home insurance – because that covers homes, but this is wrong. Remember, the renovation or conversion project that you are embarking on whether it’s a barn or a new town house is unique, so deal with an expert that understands that”.
Most home insurance policies exclude claims arising out of renovation, conversion or alteration and some even exclude maintenance as well. The problem grows when you consider that most home insurance policies don’t normally cover unoccupied properties.
So what advice does Simon give to those thinking about those thinking of doing a self build project?
“It never ceases to amaze me that some Banks and Building societies lending money to people like yourselves still insist on you purchasing ‘buildings insurance’ on your self-build BEFORE they lend you the money to get started – how does that work exactly when there is nothing there to insure?”
There are around 20,000 people doing a self-build in the UK each year and around 350,000 people doing a renovation and I’m fairly sure that around half of them are incorrectly insured, which is a real shame. Still at least this one was correctly insured……
This is a self-build project insured with Self-Build Zone that is being damped down by the fire brigade following an arson attack. Within hours of the photo being taken the fire brigade insisted the property was raised to the ground as it had become structurally unstable. This was covered by Site Insurance and became a £220,000 claim. The premium was around £492 which goes to show that insurance really does represent good value for money.
This one was no one’s fault per say (unless you can blame the arsonist) – but just imagine if the customer had purchased home insurance instead of Site Insurance……the home insurers would have quickly identified that works were taking place at the time and decline the loss. Ouch – you would have been paying the mortgage for years with nothing to show for it.
Obviously getting the correct cover is very important, so let’s quickly look at what you need to consider.
New build insurance
Now the important thing to mention here is that everyone is different – and this pulls us back to seeking expert advice relative to the project you are going to do, but generally speaking we can split up the insurance product requirement fairly simply relative to the type of project you are embarking on. A straight new self-build project only really requires Site Insurance, with Legal Expenses and a 10 year Structural Warranty.
A Conversion, Renovation or Extension all have an element of Existing Structure. Like for example the house that’s being extended, the barn prior to conversion works and so on. It’s really important that the existing bit gets correctly insured – even if it’s bordering on a derelict pile of stone and rubble! Remodelling or ‘Bungalow munching’ all fall into this second bracket. A 10 year structural warranty on a conversion may be required where there is a large element of new or structural works.
What is site insurance?
Site Insurance policies have various section headings – obviously we know our own products inside out but all suppliers are different so it is important to check the cover summary before you decide if its right for you or not.
A Site Insurance policy is basically a specialist insurance product otherwise known as a Contractors All Risks Policy – it’s designed to cover projects like yours. By the very nature of the projects you are carrying out they are quite complex so don’t read like Home & Contents policies. They normally cover All Risks of Physical Loss or Damage, which means literally All Risks and is considerably better than just Fire, Flood Storm etc which is called a named perils policy.
Site Insurance policies have distinct sections of cover:-
New Works: is the area that covers most of the project, Materials, Temporary Works, the Build in progress right up to the point you move in.
Existing Structure: is the building (remains of the building) forming all or part of the renovation or conversion project.
Public Liability: is the area that covers you if you damage someone else or their property but not an employee, that’s Employers Liability Cover
Employers Liability: covers you in the event a worker is killed or injured on site (last year a 2 workers were seriously injured and sadly one chap was killed on a self-build zone insured site.)
Plant and equipment owned and or hired in by you: Provides cover should it be stolen or damaged whilst in you care. A mini digger cost around £16,000 to replace.
Caravan and contents: on our policy we provide cover for the caravan and it’s contents whilst on site. Here at Self-Build Zone we can be flexible so if you are living on site somewhere between a barn 2 caravans and an adjoining shed, just let us know!
Personal Possessions: Everything you have with you today is covered under your contents cover that is, if you still have a home. If you are living on-site etc. Personal possessions will cover watches cash, jewellery.
Personal Accident: So far we have looked after everyone else and your project in progress – this bit looks after you!
Legal Expenses : If you fall out with the Architect, Supplier or have a contractual dispute with a tradesmen on site, you may need legal help, advice and funds to pay for a court case – that’s Legal Expenses. It’s absolutely vital that you have contracts in place between you and your builder, tradesmen, suppliers, design professionals etc., because without a contract there will be little or no prospects of legal action success.
Remember to advise your Site Insurance provider if work has already started – not many companies will cover you, Self-Build Zone will.
Self-Build Zone Director, Simon Middleton will be on th experts panel at the Masterclass Programme at the South West Homebuilding & Renovating Show (27-28 November 2010). On Sunday 28th November at 11.30am he will deliver specialist advice on site insurance and warranties and give an introduction to insurance for self-builders and renovators.
Self-Build Zone Director, Simon Middleton spoke at the recent Homebuilding & Renovating Show’s Masterclass Programme on FRIDAY 5th NOVEMBER at 11.30am where he delivered specialist advice on site insurance and warranties and give an introduction to insurance for self-builders and renovators.
View Simon’s presentation here:
For more information about Self Build Insurance, contact the team on (0)845 230 9873 or email firstname.lastname@example.org