New build homes are more popular now than in years past. In fact, the number of new build homes that are being built annually has increased by almost 75% since 2012. This means that if you are one of the many thousands that are currently in the process of purchasing a new build home, this guide will prepare you for everything you need to know to cover and insure your dream home.
What Type Of Home Insurance Cover Will You Need?
The first thing that all new build homes should have is a warranty. The warranty will cover you from any structural issues or defects. These warranties are typically valid for up to 10 years, but they only cover issues and defects that are the fault of the builder. You will need to have your own insurance cover for all other problems that may occur within the home.
You will also need buildings insurance. This type of insurance will cover your home in the event there is a flood, fire or subsidence. Buildings insurance will also cover structural issues that are not covered under your new build home warranty.
The mortgage lender will also want the buildings insurance to be active when the contracts are exchanged. They do this to ensure that their stake in the new build is also protected.
Finally, you should have contents insurance. This policy will protect the items in your home whether there is a fire, flood or you are the victim of theft.
The Most Common Problem With Getting Home Insurance Cover
Whilst you understand that you need to get home insurance cover when you are purchasing a new build home, being able to get it can prove to be a little challenging. The main reason why many homeowners are rejected by insurance firms is because of the postcode. New postcodes are typically not yet in the insurer’s system.
When there is a new build home or property, the builder or the developer will need to be sure to get in touch with the local building and planning department so the agency is aware of the new address and it can create one.
Then, a council officer will choose the address, along with the postcode. The address and postcode is then registered into the database of the Royal Mail Address Development Centre. However, the address is not considered ‘live’ until the Royal Mail is notified that it can deliver mail to the address.
Problems can arise if utility companies, banks and insurance firms do not update their databases regularly. This means that your new address may simply not be in the insurance firm’s system. These firms update their databases at different times. So, if one insurance firm denies your application, go to another one.
The Best Way To Get Your Postcode Recognised
You can avoid delays with getting home insurance cover by confirming with the Royal Mail and the builder to ensure the postcode has been registered. After that, you will need to locate a top insurer’s website that has updated their database so your new address is on file in their system.
Unfortunately, this can be a time consuming and frustrating process. It is certainly an issue you want to worry about when you are trying to purchase a property.
Issues With New Build Home Warranties
The majority of homebuyers prefer new build homes simply because they come with warranties. Just by looking at the warranty in written form, a new build home warranty is supposed to protect you from structural issues for up to a decade and defects with the new build for the first 24 months.
The issue lies between what is stated in the warranty, and what the builder or developer will do. These two are often very different. It is not uncommon to hear of new homeowners who are having difficulty to come back to the house and fix the problems.
Fortunately, there is one thing that homeowners can do to prevent this from occurring. You can ensure that your voice is heard by getting a snagging survey prior to moving in.
This is nothing more than a professional walk-through the home and creating a snagging list. These professional will then act as a liaison between you and the builder to present the new build home issues to the builder on your behalf.
How To Make A Claim On A New Build Warranty?
If you notice a problem with your new build home within the first two years after moving in, it is important that you speak with the builder. If the builder agrees that the defect or issue is their fault, they then have the responsibility to correct it within a reasonable amount of time.
Homeowners who are having difficulty getting the builder to address issues that were raised within the first two years of the new build, can then make a complaint formally. If this does not work, you can then escalate the compliant to the company that provided the warranty.
In Ireland and the UK, there are three main new home warranty providers:
- NHBC: The National House-Building Council
- LABC: Local Authority Building Control Warranty
- Premier Guarantee
If there are structural issues with the house once the two-year builder warranty has expired, you will need to go directly to the firm that provided the warranty cover.
The good news is that new build homes are often less expensive to insure than older ones. This is due to the fact that new build homes are built with the latest in building materials and technology. With more secure windows and doors, insurers are encouraged to offer discounts as new build homes are more difficult to break in to.