Home insurance for new builds
The lure of lower heating bills and immaculate kitchens make new builds attractive to many buyers, but you need to make sure you have insurance that properly protects your home.
A new build might well come with a warranty, but that will only cover you for issues specifically relating to the building work carried out by a developer. That means it’s still a good idea to take out buildings insurance that covers you beyond that, including for flood, fire or subsidence. In fact – your mortgage provider may insist on it.
This guide should answer any questions you might have about insurance for your new build.
What’s classed as a new build?
A new build is usually defined as a property that’s been built within the past two years and has never been owned, or lived in, by anyone else.
One of the most popular ways to buy a new build is off-plan, from a builder or developer. This means you buy your home before building is completed.
The trend for buying new build homes has been growing. In the year to December 2019, more than 178,000 new homes were built in England – a 9% increase compared with the previous year. But, not surprisingly, there was a sharp fall in 2020 because of COVID-19 lockdown measures. In the three months to June 2020, completion of new builds was 64% down on the same period in 2019.
What does new build insurance cover?
Although a new build warranty will cover your home against any defects or structural damage for up to 10 years, it’s still important to have home insurance in place for everything else.
A good new build insurance policy should include vital home insurance elements:
- Buildings insurance - Covers the structure of your new home plus any permanent fixtures and fittings, including a fitted kitchen and bathroom. It can cover the cost of repairing or even rebuilding your property if it’s damaged or destroyed because of fire, flood or subsidence. Mortgage providers usually insist you have buildings insurance in place from the moment you exchange contracts.
- Contents insurance - Could cover the cost of repairing or replacing the contents of your new home if they’re stolen, damaged or destroyed. Combining your contents cover with buildings insurance can often work out cheaper than buying two separate policies.
Most insurance providers also offer a range of add-ons for an extra cost, so you can tailor your policy to suit your needs. For example:
Accidental damage - if you spill red wine on your new carpet or break a window by accident, this can help to cover the costs.
Personal possessions - this can cover possessions you take with you, outside of your home. For example, your phone, purse or jewellery.
Legal expenses cover - this can help cover any legal costs associated with property disputes.
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Frequently asked questions
What are the advantages of buying a new build?
There are many advantages when it comes to buying a new build home:
You won’t be caught up in the hassle of an onward chain or risk being gazumped. Once your finances are in place and your new property is ready, you can move straight in.
Some off-plan developments give new owners the choice of certain design features, like door positioning, the colour of kitchen units and garden landscaping, so you can tailor your new home to your tastes.
If you buy off-plan in an area where house prices are rising, you’ll be building up equity before you’ve even moved in.
There’s no need to redecorate or carry out repair works – just move your furniture in.
New build properties are typically built with energy-efficient features, like double or triple glazing and roof insulation, so utility bills might be cheaper.
Building standards now require new build properties to be fitted with safety features, including industry-approved door and window locks, security lighting and alarms. These security features not only keep your home protected, but could also help reduce the cost of your home insurance.
Are there any drawbacks to buying a new build?
While there are many benefits to snapping up a new build property, there are also some downsides to bear in mind.
- New builds tend to be more expensive to buy than older buildings because of their modern fixtures and fittings, and can quickly depreciate in value.
- You may have to pay a fee to secure a plot of land for your home, which will be lost if you back out of the deal.
- Construction work might get held up, for example by a global pandemic. If the delays run on for too long, your mortgage offer could expire.
- If you’re one of the first people to move in to an area of new-builds, you could find yourself living on a building site for months.
Why would I need insurance for my new build?
New homes offer lots of benefits, but they aren’t tried and tested. That’s another reason why insurance is still important. For example, once you move in you might come across a few problems – leaking showers, poor tiling, for example – and home insurance could cover you for any damage caused.
And to make sure you’re covered for any repairs, you should confirm that your builder is registered with the National House-Building Council (NHBC), because damage from poor or faulty workmanship often isn’t covered under a home insurance policy.
What is the National House-Building Council (NHBC)?
The NHBC offers the Buildmark Certificate – a 10-year warranty for new homes and new conversions. In the first two years, your builder must rectify any defects resulting from the work they did, like leaky windows letting in rain, but not issues down to simple wear and tear.
The following three to 10 years are covered for structural problems resulting from the build – which includes the roof, floor, staircases, windows and doors.
NHBC Buildmark also covers you if you’ve exchanged contracts and the builder goes bankrupt before your property’s finished.
What happens if my new house doesn’t have an NHBC Buildmark Certificate?
Around 20% of builders don’t register with the NHBC, so there’s no guarantee you’ll have a Buildmark Certificate. If not, ask your builder why they haven’t registered with the NHBC. They may have legitimate reasons – perhaps they’re a small company and can’t afford the fees – but it’s a good idea to find out what the reasons are.
If you still want to go ahead and buy the house, you’ll need to take out your own buildings and contents insurance for your new build. Remember, you should buy buildings insurance from the date you exchange contracts.
Can I get the Buildmark Certificate on a new conversion?
Yes, if you’re buying a newly converted property you may be able to get a Buildmark Certificate. This will give you reassurance that you’re protected if problems crop up in the future.
But be aware that on conversion properties, Buildmark will sometimes add exclusions to the cover – these will be printed on your insurance certificate.
I’m moving into a home that’s a couple of years old. Is the Buildmark Certificate transferable to me?
Yes, the Buildmark Certificate covers the property, not the owner, and is fully transferable during the lifespan of the certificate. So, whether you’re buying or selling a home with a Buildmark policy that’s still in force, the new owner benefits from any remaining cover. Ideally, the policy documents should be handed over on completion.
What level of cover do I have with Buildmark?
The most Buildmark will pay out is the original purchase price of the property, as shown on the insurance certificate, up to a maximum of:
- £1,000,000 for a newly built home (up to a maximum of £25 million for all homes in a continuous structure).
- £500,000 for a converted home (up to a maximum of £5 million for all homes in a continuous structure).
The limits are increased by 5% of the original limit on each completion date anniversary, to allow for inflation. Buildmark then deducts any amount it has paid, or is going to have to pay, for claims it’s accepted. You can see full details in the Buildmark Policy Document.
There isn’t any kind of excess on the policy, so you don't have to pay towards claims that are accepted. But there’s a minimum claim value shown in the documents.
Do I still need buildings insurance for my new build
Your mortgage provider will usually insist you have buildings insurance. If you own your home outright, without a mortgage, you don’t need to have this insurance. But it might still be a good idea as, without it, you won’t be covered if flooding, fire, water leaks or subsidence damage the building.
What about home contents insurance?
Again, it makes sense to have it. Neither NBHC nor buildings insurance will cover you for theft or accidental damage to the contents of your home, so you’ll need to make sure they’re protected. Consider combining your buildings and contents policies, as it can work out cheaper than buying them separately.
Do I need legal expenses cover?
If you end up in a dispute with your builder or new neighbours, legal expenses cover could prove useful. This optional extra can be added to your home insurance (for an extra cost) to protect you against legal costs relating to your new home.
Most legal expenses policies also include a 24/7 legal helpline, which could advise on other legal matters, like personal injury claims, employment disputes and tax matters.
If you do opt for legal expenses cover, check the terms and conditions carefully before you buy, so you know exactly what you’d be covered for and whether it’s worth the extra cost.
Is insurance cheaper for new builds?
New builds are often cheaper to insure than older properties. This is because they’re usually built with high-standard safety features, so there’s less risk of a break-in.
A brand-new roof, wiring and plumbing systems also mean there’s less risk of making a claim on a new build than with an older house.
How do I get insurance for a new build?
Getting home insurance for a new build should be largely the same as for any other property. The only snag you might encounter is that some insurance providers may not recognise your postcode.
When a new home is built, the developer or builder needs to contact the local authority’s planning department so a new address can be created. This is then officially registered with Royal Mail. Problems can arise if your new home isn’t yet logged on the insurance provider’s database, but you can always try an alternative provider as they might have updated their systems faster.
How much does home insurance cost?
51% of people could achieve a quote of £136 per year for their buildings and contents home insurance based on Compare the Market data in December, 2021.
51% of people could achieve a quote of £57 per year for their contents home insurance based on Compare the Market data in December, 2021.
51% of people could achieve a quote of £109 per year for their buildings home insurance based on Compare the Market data in December, 2021.Start a quote
What do I need to get a quote?
To get a quote for your new build home, you’ll need to give us a few details about yourself and your property, including:
- the rebuild value of your home
- the level of cover you need
You’ll also have the opportunity to tailor your search by adding any extras you might need. Once we have the information we need, we’ll give you a list of suitable quotes to choose from.
Why use Compare the Market?
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^^Correct as of December 2021.
^^^Based on online independent research by Consumer Intelligence during November 2021. 51% of customers could achieve this saving on their Buildings and Contents insurance through Compare the Market.
From the Home team
What our expert says
“Remember to make sure your new postcode is registered. You can do this by contacting your builder/developer or Royal Mail directly. If your postcode isn’t on your insurance provider’s system, it can be difficult to assess risk for insurance purposes and provide an accurate quote. You might want to consider an alternative provider, if this is the case.”