Housebuilders - Make sure you have the right New Homes Structural Warranty.
We have recently received a number of enquiries from FMB housebuilder members wanting some advice about New Homes warranties for which they have received quotations. We thought it would therefore be a good idea to provide some guidance for the housebuilders among you that may also be looking for the right cover.
Firstly – what is a New Homes Structural Warranty?
It is a structural defects insurance designed to provide cover for newly built or converted homes. The policy protects the homeowner for insured defects that might be encountered in the first 10 years after completion of the property, which were not apparent at the time that the property was finished. In short – its provides cover for structural defects or water ingress!
Why do you need one?
Whilst it’s not a legal requirement to purchase a warranty, it is a requirement of most mortgage lenders that any new dwellings must have 10 years structural defects cover. You may find yourselves unable to sell the property without one, as the potential buyer may not be able to get a mortgage.
Is it just new builds?
It’s any creation of a new dwelling – that could be typical new build, a barn conversion or the conversion of offices into flats - to name just a few.
What’s our advice when choosing a structural warranty?
- Check the exclusions!
On several of the quotations that have been provided to us we have noticed clauses like “does not include cover for any elements of flat roof” or “does not include the basement”.
You may remember from our article in the December2018/January 2019 edition of Master Builder magazine that 33.5% of our structural warranty claims relate to flat roof leaks so a policy that excludes this section of the works may not be ideal! Not only that but you may find that mortgage lenders then ask for additional warranties specifically covering those elements that have been excluded from your new homes policy – making it more costly in the long run.
- Check whether you have cover whilst works are ongoing
Particularly if you are building for a specific client this section of the warranty can provide invaluable peace of mind and reassurance, often protecting their deposit should you be unable to complete the works.
- Check if reinstatement value is included.
This is for those of you that undertake conversions. By reinstatement value we mean the rebuild cost of any pre-existing structure. In order to fully cover a conversion development we believe that you need to cover both the reinstatement value and the build cost to ensure that, should the worst happen, there is enough coverage under the policy to rebuild the property.
Why is getting the right policy so important?
Ultimately it is the future homeowner that benefits from the policy but we are always looking to improve standards in the whole construction industry – even if that just means getting the right policy for your development, to pass onto you clients. Making sure there are no major elements missing excluded from the policy should prevent the further home owner problems down the line.
There are so many great reasons to make FMB Insurance your first choice for all your construction insurance requirements.
- Policies underwritten by marketing-leading insurers (rated A+)
- Peace of mind and reassurance
- Access to expert & qualified surveyors
- Dedicated team
- Competitive prices
- Efficient and robust help if things go wrong and you need to make a claim