Self build insurance: do I need it and what does it cover?

Designing and building the home of your dreams can be an exciting and rewarding task. It is also likely to be one of the most challenging and one of the largest expenditures of your life, making it crucial to have self build insurance in place to protect your project. If you’re building your own home, you’ll need to take out a specialist Self build insurance policy. 

What is self build insurance?

Self build insurance is a specialist home insurance policy that covers you, your builders, your building site and your new home during the construction process. 

Standard home insurance won’t provide sufficient cover as it only protects you against the risks that come with owning a property. A home contents insurance policy will protect your belongings inside the property, for example, while a buildings insurance policy will protect the structure of your home. 

Self build insurance, on the other hand, will provide more tailored cover and protect you against the risks involved when building your own home.

Image credit: Future PLC/ Brent Darby

What should a self build insurance policy cover?

A good self build insurance policy should provide cover for the following:

• Damage to the property and surrounding building site due to fire, storms and floods
• Damage to and theft of tools, materials and equipment 
• Employers’ liability cover to protect you against claims made by anyone working on the site in the event of injury or death
• Public liability cover to protect you if damage or injury is caused to a third party or members of the public as a result of the building works
• Legal expenses cover in the event legal action is taken against you
• Non-negligence cover or JCT 21.2.1 insurance to protect you against damage to surrounding properties caused by collapse or vibration. You won’t always need this cover, it will depend on the type of work being carried out.

Do I have to take out insurance if I am building a house?

The cost of building your own home can be tens or hundreds of thousands of pounds, so it is sensible to protect your investment with the right insurance policy.

Even if your builder or main contractor has their own insurance policy, it won’t cover any tools or equipment you’ve bought yourself and it won’t usually cover you when your contractor is not on site. 

Your mortgage lender is also likely to require proof of self build or site insurance before agreeing to release the funds.

‘Mortgage lenders will often require site insurance to be in place on a project during the build, so that their investment is protected against accidental, malicious and storm damage,’ explains Jake Fitness of Self-Build Zone. 

‘A 10-year structural warranty for self-builders is [also] usually a requirement for mortgage lenders to release funds for the building project,’ he adds. ‘This covers the build against structural defects for a period of 10 years following the completion of the build.’

How much does self build insurance cost?

Like any insurance policy, the amount you pay for this type of insurance will be based on several factors and linked to the risks involved. 

‘Site insurance is based on the duration of the project, the reinstatement values and which options (like hired plant tools and equipment) you require,’ says Simon Middleton, managing director at Protek Group Limited. ‘A typical £250,000 self-build project built over say 12 months would typically be in the region of £500 plus insurance premium tax.’

He adds: ‘A self build structural warranty will typically cost around £2,500 including the technical audit inspections.’

Image credit: Future PLC/ Dan Duchars

Where can I buy insurance?

You won’t usually be able to buy self build insurance from a standard home insurance provider. Instead you’ll need to shop around and compare premiums with dedicated self build insurance providers, such as Self-Build Zone and Protek.

You can often compare quotes online, or you may need to give the insurer a ring to chat through your options.

Do I need to change policies when the build is complete?

This specialist insurance will no longer be a requirement once the project is complete. However, you will still need some form of cover in place.  

‘Once the property is complete and ready for occupation, the site insurance policy ends and the 10 year structural warranty policy starts. It is at this point that you will need to secure traditional home and contents insurance,’ says Middleton.

Buildings and contents insurance usually works out cheaper when combined under the one policy. But be aware that if your home has a non-standard design you may need to take out a non-standard home insurance policy to ensure you’re fully covered.

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