Site insurance is a specific type of policy designed for self build, renovation, extension or conversion projects. The cover continues during the planning process and construction phases until the project is completed and taken into use.
In a nutshell, site insurance is an insurance policy designed for self build, extension or conversion projects that covers the construction project itself instead of the buildings. It can also provide cover for planning permission, professional fees and retention money in the event of a claim.
Unlike home and buildings insurance, site insurance can be tailored to the self builder’s individual circumstances by ensuring that the policy covers planning permission, professional fees and retention money.
Site insurance is normally based on the value of the building and can be extended to cover loss and damage to contents.
Construction insurance is often expensive and this makes it essential to shop around and get the right cover at the right price.
When you choose site insurance, you will be offered a range of packages, depending on what you need. They work in the same way as a standard private medical insurance policy and premiums can be made up of fixed annual payments and/or monthly contributions. This means you don’t have to pay the entire amount up front and you can make monthly contributions for as long as you like.
But if you are going to self build, extension, or convert from another building to a dwelling, then site insurance is a must.
More and more people are choosing to self-build because it is a cost effective and fun way of creating a house or garden extension.
If you are self-building it is essential that you get the right type of insurance, signed building contracts, and a comprehensive and fully executed project plan.
If you are self-builder, taking the right type of site insurance will provide a security blanket while the building project is in progress. The building is not allowed to be occupied until it has been risk assessed and insured.
If you have a ‘buy-to-let’ property rented out to tenants and you are thinking about undertaking a self build project, a site insurance policy could cover any loss or damage to that property during the construction period. If you lease out your only home, you might be able to get an alternative residence policy, which provides cover on a temporary basis.
During the build your house will need £1.5m of cover in total, but once it is completed you will be able to get a better comprehensive Home Insurance policy for your building.
The home-building process can be an exciting process for the self-builder and an adventure for the family. But it is important that you understand the insurance implications for your site.
Self Build and Home Improvement are not the same. Home Improvement involves minor alterations such as new bathroom, kitchen, or hallway which can easily be handled by your current insurance policy. Self-Build is a construction project that is expected to change the use of a building or structure permanently when completed. This means that all your assets and buildings need to be insured against this eventuality.
Site Insurances takes into consideration the following for a site:
- Loss of rent and business interruption
- Loss of goods
- Professional fees
- Dirt and cleaning costs
- Key man insurance
- Legal fees
- Cost of Works
- Loss of Furnished Homes
- Proceeds of Sale
It is important to understand the building process, the different stages of construction and the time it takes to build a project. You need to know if your building contract covers you for “material change orders”.
You should also choose what amount of cover you need for the business interruption and any interruption to your normal living habits. Time is money and the sooner you receive your money, the sooner you can get on with building your new home.