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Consumer Intelligence Feb 2014

Home insurance if you live in a new-build property

Some people look at a period property and see character and charm. Others see only pitfalls and problems. Will the roof hold out? Are the windows draughty? Will it need a new boiler? Many buyers therefore choose a new-build property with all its sparkle and shine - as well a fitted kitchen and double garage.

Of course, things can still go wrong if you buy a flat or house that has been newly constructed, which is why it's important to make sure you have the right new build home insurance and warranties in place.

If your builder is registered with the National House-Building Council (NHBC), the property will almost certainly come with a 10-year warranty known as Buildmark. The warranty covers any defects or damage that arise in the first two years as a result of the builder's failure to meet the NHBC's standards. So, if the tiles fall off the roof or the windows don't close properly, the builder will have to put the problem right.

There is no excess to pay if you make a claim under this section of the warranty. There is also no minimum claim amount. Watch out for exclusions, though. If you do not maintain the property, you could have difficulty making a claim. The new build insurance certificate might also carry specific exclusions for your home.

In years three to 10 of ownership, the builder is only responsible for the repairs to certain parts of the house, mainly the structure and weatherproofing. Minimum claim values also apply to this section of the policy. In other words, if the damage is only minor and would cost very little to repair, you would be expected to pay out of your own pocket.

Buildmark cover also protects the homeowner in case the builder goes bust after the exchange of contracts so cannot complete - or even start - the construction of your home.

Check your new build insurance cover

The NHBC estimates that 80% of new build properties carry its Buildmark warranty. But you should check with your builder to make sure. If your property is not covered, there are a number of other firms that offer 10-year warranties so it's probably a good idea to arrange appropriate protection - it might even be a condition of your mortgage. And if you sell the house before the 10 years is up, you can usually transfer the unused portion of the warranty to the new owner.

A structural warranty offers peace of mind to anyone who buys a new build property, but it does not protect your home against all risks. For example, if the property was damaged by flood or fire, you would not be able to claim on the warranty.

You should therefore take out standard buildings insurance for your new home. In fact, your mortgage lender will most likely insist that appropriate cover is in place before it releases any funds.

It’s a good idea to conduct a room-by-room inventory...
It's a good idea to conduct a room-by-room inventory...

Buildings insurance

Buildings insurance covers the structure of the property in the event of a number of incidents, including flood, fire, storm and subsidence. The sum assured is the maximum the policy will pay out, so it's important to get the figure right.

The sum assured should reflect the rebuild cost of the property, as distinct from the market value. You would then be covered if the worst should happen and your home was completely destroyed. You should be able to find out the rebuild cost from the builder, or from the mortgage documents.

Most buildings insurance policies carry an excess and the amount you have to pay could vary according to the reason for the claim. If you have a problem with subsidence, for example, the excess could be as high as £1000, compared with a standard excess of about £200.

Contents insurance

Contents insurance is not compulsory but most homeowners deem it necessary. After all, the value of our possessions can quickly add up. It's a good idea to conduct a room-by-room inventory to make sure you calculate the right amount of cover, not forgetting the loft and the garage.

If you keep anything particularly valuable in the home, such as a painting or jewellery, you should check the single item limit as most insurers will only pay up to a certain amount for an individual item. You should also read the small print if you want cover for your bicycle as part of your contents insurance.

Most insurers will allow you to add accidental damage protection for an extra premium, providing cover if you break a vase or knock over a tin of paint on the carpet, say. You can also include 'all risks' insurance if you want to cover any belongings you take out of the house, such as an iPhone or laptop.

It's quick and easy to find competitive new build home insurance quotes using Moneysupermarket's free, independent comparison service. We carry details of all the leading home insurance providers so we can save you time and money.