The number of new homes being built has increased by 75% since 2013. Some of the reasons why people are attracted to new homes are that they are brand new, maintenance free, immaculately presented, integration of modern amenities, energy efficient and that they come with 10 years building warranty. The main provider of new build home warranty is National House Building Council (NHBC) which covers nearly 80% of the new built homes. Other providers are Local Authority Building Control Warranty (LABC), and Premier Guarantee.

So if you are one of those thousands of people who are in the process of buying a newly built home this is what you need to know about the insurance.

Although it’s widely advertised as “new homes come with 10 year building warranty”, you need to know more than that. Building warranty only covers for major problems with load bearing external wall and load bearing parts of floor, foundations, chimneys and roofs.

During the first two years the insurance also covers issues that may have been due to the builders poor work such as window not property sealed, heating not working, door not closing properly, no power etc.

If you are buying the property “off plan” which means before the building is finished the insurance also covers for your deposit, which means if the company goes bust you will get your deposit back.

With the building insurance that covers from off-plan, first two years, and 3-10 years do you still need to take additional insurance?

The answer is YES; but Why?

The reason is due to Fire, Flood, Natural Disasters, Theft/Burglary damage, and risk from Negligence that the lender (mortgage provider) would like to protect their stake in your home.

In addition to the home insurance you may want to take content insurance to protect your contents in your home such as TV, appliances, jewellery, electronics etc. This is not a requirement by the lender.

Source: HomeOwnersAlliance