In a challenging economy, protecting your project from risks has never been more important. Giles Fallan of BuildSafe shares how the right selfbuild insurance can help give you confidence to make your dream home a reality.
According to the National Self Build Association (NaCSBA), one in three people in the UK want to build their own home. To help make self-building more attainable, the UK Government launched their Help to Build loan in 2021, aiming to enable 40,000 self-built new homes every year. Yet despite this government data shows self-builds have been declining in recent years, with registrations of interest down 34%, planning applications down 12% and permissions down 23% in 2022.
So, what is stopping people choosing the self-build route?
Understandably, many self-builders are first timers – and navigating finance, planning and the build can be daunting processes. Concerns around the complexity of acquiring land and navigating planning permissions, as well as the impact of the cost-of-living crisis, are often cited as barriers to choosing self-build, and reasons for project delays.
As well as government loan support, the increased options offered by pre-fabrication and modern methods of construction mean self-building is arguably more attainable than ever. But undoubtedly it is also a challenging economic period, and conversations around materials costs, project delays and the number of insolvencies among building companies is a concern for those looking to plan a project.
Knowing that your project is protected is now more important than ever. Many potential self-builders may not realise that having the correct self-build insurance will not only help you secure the best finance option available to you, but it can also help you feel confident and protected to get your project off the ground.
How can self-builders insure themselves for success?
Self-build insurance or warranty protects you and your contractors during construction, as well as your home at every stage of the build and 10-year cover against major structural damage after completion.
A self-build insurance policy will often include the following, but this is by no means a definitive list:
- Contractors All Risk: covers incidents such as fire, theft, vandalism, flood and storm damage.
- Employers’ Liability: some self-builders may not be aware you are deemed the employer for insurance purposes, and so liable for all workers and subcontractors’ welfare, making this cover a key protection.
- Public liability: protection in the case of damage to your build from a person outside the site, as well in the case of damage, injury or loss that is suffered by third parties or the public. It is advisable to get this in place as soon as land is purchased.
- Legal Expenses Insurance.
- Contract Works: repair or replace any part of the build in the event of damage or structural defects.
Getting the right cover for your unique project is key. Specialist insurers can help alleviate your concerns, for example it might be that protection against third party insolvency or loss of deposit is a priority for you and insurers can look to secure that.
Is self-build insurance required for every project?
From bungalows to barn conversions, a self-build structural warranty covers any new build, conversion or major refurbishment of a residential home.
Navigating the regulatory and contractual obligations and knowing whether you have the correct cover in place may seem daunting. This is where getting support from an expert team who have decades of experience working with self-build projects is vital.
Self-builders may sometimes be unaware of specific requirements to have cover. For those looking to secure a loan it is very clear as lenders will ask for insurance. What you may not know is that lenders also require a self-build warranty to sell a property under 10 years old. So even if you are self-financing your build, it is important to have it in place, not only to protect you and your home but also for future buyers.
You are always advised to put your cover in place before a project starts, but it is also possible to get late registration and retrospective cover. Even if your build is already in progress insurance brokers can guide you through the process to ensure you have the cover you need.
Is the insurance process time consuming?
As a self-builder, insurers understand that you don’t want to spend your time filling in forms and chasing for updates. Working with an expert insurance provider ensures the process is hassle free. Their expert teams can manage the entire process, enabling you to focus on the day to day running of your project.
The right broker will not only aim to find the best price for the most appropriate cover to meet your requirement, they’ll also help you navigate all insurance requirements through your projects. From arranging the contract and site inspection required by the policy on your behalf, to organising warranty certificates once building control have certified the development as complete, they can – and should – be with you every step of the way.
Confidence is key, and the right insurance broker will help you understand how to protect your project, giving you the assurances you need to take the next step and make your self-built dream a reality.
Giles Fallan is CEO of BuildSafe