Confused already by variety of insurances available

[LizG Cambridge]

I have a very broad question in that we are doing a combined refurb and extension of a house and I'm totally confused by the array of insurances on offer. I've been reading various blogs and websites and I'm  now completely bamboozled by whether we need Self Build Insurance (as it's not a whole new build), Renovation Insurance (as we are doing lots of structural renovations to the existing property but also building a new two-storey structure on the back that is actually slightly bigger than the original house), Structural Warranty Insurance (does that apply to hybrid build/refurb projects like this? is it needed for lenders if we refinance or sell it?) ...  Do we need all of them? None of them? A combination?

 

I realise some of this might come down to personal choice and attitude to risk but I'm finding it hard to get clear on what's legally required and none of them is cheap so while I don't want to expose us to a high level of risk I also don't want to over-insure or to buy inappropriate policies that wouldn't cover us anyway if the worst should happen! I know there is Site Insurance as well and we will need that.

 

A rookie question I know but it seems like a tough one to unravel as the insurers themselves seem happy to sell you an unlimited number of policies!

 

Thank you in advance for any insights! Liz

 

[PeterW]

First question - do you have a mortgage..?? That will affect the insurances required. 
 

Secondly, are you living in it while you refurbish ..?? That can also affect the products available. 

[ToughButterCup]

11 hours ago, LizG Cambridge said:

I have a very broad question in that we are doing a combined refurb and extension of a house and I'm totally confused by the array of insurances on offer. ... 

 

Have you asked an Insurance Broker for advice? If so, what was it?

[LizG Cambridge]

14 hours ago, PeterW said:

First question - do you have a mortgage..?? That will affect the insurances required. 
 

Secondly, are you living in it while you refurbish ..?? That can also affect the products available. 

We do indeed have a mortgage Peter (a big one!). Thankfully we're not living there, we're staying in rented accommodation, probably until the end of this year (at least ...)

[PeterW]

Ok so this sounds like you need to put in place insurance to meet your mortgage providers requirements (and assuming you have told them you’re ripping apart their asset..!) and also to manage the risk based on structural work and works in progress as the new build completes. 
 

Try GSI Southern as a broker - they are easy to talk to and will find you a range of products. 

[LizG Cambridge]

3 hours ago, ToughButterCup said:

 

Have you asked an Insurance Broker for advice? If so, what was it?

Good point. I've gathered quite a few quotes but I think they're all from single insurance providers rather than a broker ... some of them positioned themselves as brokers but are actually just selling their own products. So I probably need to delve further into the detail before acquiring yet more quotes to find a firm that actually can offer independent advice rather than just throw more and more products into the mix and confuse me even more!

[Bitpipe]

Ok, big red flag warning here - if you have a mortgage you NEED to get their approval in advance otherwise they can force you to redeem the mortgage if they find out as you'll have breached their conditions.

 

I know many people don't do this and just rely on not getting caught but it takes one troublesome neighbour to make a call and you're in hot water.

 

Your regular domestic building insurance will only go so far, again they need to be told.

 

If you're doing a major project then you need build insurance that will cover the site and cover re-build should the whole thing collapse / catch fire the day before you move back in. Also known as site insurance.

 

Only when you have BC sign off and works are considered to have finished can you re-establish domestic buildings insurance.

 

 

[LizG Cambridge]

1 minute ago, LizG Cambridge said:

Good point. I've gathered quite a few quotes but I think they're all from single insurance providers rather than a broker ... some of them positioned themselves as brokers but are actually just selling their own products. So I probably need to delve further into the detail before acquiring yet more quotes to find a firm that actually can offer independent advice rather than just throw more and more products into the mix and confuse me even more!

Ps Love your user name, Tough Buttercup!

 

[LizG Cambridge]

1 minute ago, Bitpipe said:

Ok, big red flag warning here - if you have a mortgage you NEED to get their approval in advance otherwise they can force you to redeem the mortgage if they find out as you'll have breached their conditions.

 

I know many people don't do this and just rely on not getting caught but it takes one troublesome neighbour to make a call and you're in hot water.

 

Your regular domestic building insurance will only go so far, again they need to be told.

 

If you're doing a major project then you need build insurance that will cover the site and cover re-build should the whole thing collapse / catch fire the day before you move back in. Also known as site insurance.

 

Only when you have BC sign off and works are considered to have finished can you re-establish domestic buildings insurance.

 

 

Thank you! I'm pretty sure we do have the approval of our mortgage provider but you and PeterW have got me thinking now so I will need to double check that as a priority ...

 

The regular insurance company does know as we're not living at the property and have a specific policy for that. At least!

[Bitpipe]

1 minute ago, LizG Cambridge said:

Thank you! I'm pretty sure we do have the approval of our mortgage provider but you and PeterW have got me thinking now so I will need to double check that as a priority ...

 

The regular insurance company does know as we're not living at the property and have a specific policy for that. At least!

 

Great, that's a good start. 

 

My understanding is that insurance falls into two buckets - insuring during the works and insuring the end result for a period after the works.

 

Site or renovation insurance covers you for all the eventualities during doing major works on site - theft, damage, accidents, 3rd party liability, collapse, fire etc.

 

Structural warranty or latent defects covers the works when complete for the next 10 years or so. Usually required by lenders to mortgage new builds, or requested by purchasers, No idea what the position is for renovations. TBH they are not that useful as they have so many caveats they are hard to claim on but they are a necessary evil. Often tied to some kind of inspection activity.

 

You can also get insurance backed warranty for specific trades or works  (e.g. our basement waterproofing has a Sika insurance backed warranty).

 

Hope that helps.

[LizG Cambridge]

20 minutes ago, Bitpipe said:

 

Great, that's a good start. 

 

My understanding is that insurance falls into two buckets - insuring during the works and insuring the end result for a period after the works.

 

Site or renovation insurance covers you for all the eventualities during doing major works on site - theft, damage, accidents, 3rd party liability, collapse, fire etc.

 

Structural warranty or latent defects covers the works when complete for the next 10 years or so. Usually required by lenders to mortgage new builds, or requested by purchasers, No idea what the position is for renovations. TBH they are not that useful as they have so many caveats they are hard to claim on but they are a necessary evil. Often tied to some kind of inspection activity.

 

You can also get insurance backed warranty for specific trades or works  (e.g. our basement waterproofing has a Sika insurance backed warranty).

 

Hope that helps.

Really helpful, thank you BitPipe! Has helped me get my thinking in order, especially your idea of separating into two buckets. We will definitely need the 'during works' site insurance. The post works thing is definitely less clear and having read a few policy documents I see exactly what you mean about the caveats and exclusions. But the lender aspect that you and others have raised is hugely relevant, so I am following up on that angle which will hopefully give me a clearer steer on what type of product I need for the post works aspect and then I can focus on which specific product is the best value given my needs etc.

 

All very boring but potentially critical stuff I guess and just part of the overall project! 

[Bitpipe]

30 minutes ago, LizG Cambridge said:

Really helpful, thank you BitPipe! Has helped me get my thinking in order, especially your idea of separating into two buckets. We will definitely need the 'during works' site insurance. The post works thing is definitely less clear and having read a few policy documents I see exactly what you mean about the caveats and exclusions. But the lender aspect that you and others have raised is hugely relevant, so I am following up on that angle which will hopefully give me a clearer steer on what type of product I need for the post works aspect and then I can focus on which specific product is the best value given my needs etc.

 

All very boring but potentially critical stuff I guess and just part of the overall project! 

 

Yup, most latent defect warranty policies have an initial 2 year period where they only cover issues if the trader has ceased trading. If the trader just don't want to fix it then you need to sue them.

 

Thereafter the warranty covers hidden (i.e. latent) defects only, but again if you noticed the issue within the first two years then you're not covered. And I'm sure there's a bunch of other get out of jail cards for them after that

 

 

 

Edited March 24, 2021 by Bitpipe

[ToughButterCup]

18 hours ago, LizG Cambridge said:

Ps Love your user name, Tough Buttercup!

It's not one of my choosing.@Russell griffiths made me change my screen name because he told me to '... toughen up buttercup... 'I felt so wounded, devastated, shattered, traumatised that I had to....

His fault, not mine. 

Edited March 25, 2021 by ToughButterCup

[LizG Cambridge]

4 hours ago, ToughButterCup said:

It's not one of my choosing.@Russell griffiths made me change my screen name because he told me to '... toughen up buttercup... 'I felt so wounded, devastated, shattered, traumatised that I had to....

His fault, not mine. 

?

[Jtb]

On 24/03/2021 at 13:06, PeterW said:

Ok so this sounds like you need to put in place insurance to meet your mortgage providers requirements (and assuming you have told them you’re ripping apart their asset..!) and also to manage the risk based on structural work and works in progress as the new build completes. 
 

Try GSI Southern as a broker - they are easy to talk to and will find you a range of products. 

 

I realise this is a couple of months ago, but I'm wading through insurance at the moment, I did try GSI Southern but just for the benefit of future googlers, GSI don't offer renovation insurance (their website says they do, but when you speak to them they don't).