What is new build home insurance?
Home insurance covers your new build home against damage from:
- Fire
- Smoke
- Theft and attempted theft
- Lightning and storm
- Flood
- Malicious damage
- Earthquakes
- Falling trees and more
This is different to the protection offered by your home builder’s new build guarantee or warranty - which only covers your home for any damage or repair costs that are caused by building work.
You’ll need to take your new build home insurance policy out through a third-party insurer.
What does buildings insurance cover?
Buildings insurance covers the cost of damage repair or rebuild to the physical structure of your new build home and the fixtures, including fitted kitchens and wardrobes. It also covers the permanent structures you have on your land – including outbuildings and garages.
Standard buildings insurance policies can also help to cover the cost of:
- Alternative accommodation if your home isn’t suitable to live in during repairs/rebuilding
- Public liability in case a third party has an accident at your home and the accident was caused by your building
- Accidental loss or theft of your keys and accidental damage to external door locks
Additional levels of cover for home emergencies (failure of the electricity supply or main heating system), legal claims and other events may also be added at extra cost.
Some buildings insurance policies will come with a basic level of accidental damage cover. This would cover accidentally drilling through a pipe or cutting a wire, for example. You may need to add this as additional cover, or increase the level of cover, to protect your home against accidental damage from particular events.
You’ll need to read the policy documents to see the full list of events that are covered as each policy differs. The policy will also list any events that cause damage to your home’s structure where you won’t be able to claim on your buildings insurance. For example, wear and tear and cosmetic damage to your new build isn’t likely to be covered.
What does a new build guarantee cover?
Your new build guarantee will offer different levels of cover for building works, depending on the age and status of your new build.
Pre-completion: the new build guarantee protects the value of the deposit you’ve put down if the builder is unable to complete your home. The NHBC’s Buildmark protection for new builds will cover a maximum deposit of 10% of the original purchase price or £100,000 – whichever is lower.
Years 0 – 2: the new build guarantee agrees that the builder will repair any structural, fixture or fitting defects for the first two years you’re in your new build – so long as they aren’t caused by general wear and tear or a lack of maintenance.
Years 3 – 10: you won’t have the defect protection after the end of year two, but you will have eight more years’ insurance for damage to your home. This extra cover includes repairs required because the builder did not build certain parts to standard, for example. It also covers your home being built on contaminated land, and some policies will offer additional cover for not meeting Building Regulations during the build. This eight-year warranty will cover your new build up to a maximum of 10 years after completion.
Do you need buildings insurance for a new house?
Most mortgage providers will say you need to have a buildings insurance policy in place to borrow from them. This helps to protect the money they’ve lent you to buy the home.
Your buildings insurance policy will most likely need to start from the date you exchange contracts, because you may be liable for any building damage that happens to the new build home between exchange and completion.
Some builders will have their own building protection in place to cover the property between exchange and completion. It’s best to check your sales contract to see when they want you to have buildings insurance in place.
If you own your home outright and don’t have a mortgage, buildings insurance can help to protect your investment.
Things to keep in mind…
If you’re looking for a home insurance policy for your new build, there are a few things to keep in mind:
- Register your new postcode: you might find it difficult to get a home insurance policy for your new build if the postcode isn’t yet on the home insurer’s database. If they don’t have the postcode for the property on their system, this makes it difficult to assess the risk and then provide a quote. Your builder will need to contact the local authority’s planning and building department so they can create a new address. Try contacting them and Royal Mail to check your address and postcode is registered. You’ll then need to find an insurer that has recently updated their database and recognises your new address. You might find you have the same problem registering your car insurance at your new build address
- Insure your contents: the new build guarantee and buildings insurance policy won’t cover the contents you keep inside your new home against damage. You’ll need to take out a contents insurance policy or a combined buildings and contents home insurance policy to make sure your possessions are covered too
Comparing new build home insurance policies
You can compare home insurance policies for your new build using MoneySuperMarket. Choose from combined buildings insurance and contents insurance and buildings-only insurance. Set it to begin from your exchange date (if that’s when your sales contract says you need the policy to start) and make sure your new house is covered.
You’ll need to include the market value of your new build property, plus the cost of rebuilding your home. We use the Building Cost Information Service (BCIS)’s rebuilding cost calculator from the Royal Institution of Chartered Surveyors (RICS) to offer you an independent estimate. You can also decide to seek professional advice from a surveyor to help make sure the cost is an accurate reflection of your new build’s total rebuild cost.