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Structural Insurance: When and Why is it Important?

Although they’re commonly perceived of as a ‘just in case’ support that may ultimately never be called upon, warranties matter a lot- even if you never need to use them to cover a claim for a structural repair or rebuild.

If you enter an estate agent’s office, one of the main selling points they’ll be interested in is your insurance coverage for the property in question.

Properties that have been newly constructed or converted should be covered by a new home warranty, also often referred to as latent defects insurance. Lenders want assurance that the property has a solid warranty against building defects, and even after the initial conveyance, lenders will continue to see the home as ‘new build’ for around 10 years from the date of completion.

Even when buyers are in a position to buy the home with cash instead of taking out a mortgage, a solicitor will strongly recommend that they buy a property with a new home warranty or structural insurance in place, to ensure that they will be able to sell on the property in the future to a buyer who does choose to go the mortgage route.

CRL are one of the insurance brands that are popular with self-builders, developers and mortgage lenders. There are slight variations between each of the structural insurance brands, but generally speaking all protect you from the point of reservation onward, and they usually cover exchange funds and reservation deposits, which is especially important for anyone who intends to buy off-plan.

There is usually a two-year period after completion when you can report any observed defects directly to the developer. CRL, however offer the advantage of immediate cover with no extended builders liability cover, making life easier for customers and developers. No other competitor currently offers this. For a full introduction to CRL and what we offer, take a look at our Structural Insurance Overview & Benefits page here.

Specialists in Construction Insurance

Structural Insurance Inspections

For the insurance to be approved, the property must be inspected at each stage of the build and signed off.

Cover takes effect from the date of completion, and any defects are typically reported to the insurance issuer directly. Cover is available for both newly constructed properties and those that have just been converted, such as barn conversions or upgraded heritage buildings. In most instances (and especially where apartments are concerned), a newly converted property is regarded as a new home for mortgage purposes, and a warranty will be necessary in order to obtain a mortgage.

An alternative, less secure alternative to Structural Insurance is a professional consultant’s certificate. These documents are created by architects, engineers, surveyors, and other building professionals to personally guarantee any building work for six years. This option is sometimes used by developers who work with historic property conversions, but is not as comprehensive as structural insurance and is not accepted by all lenders. It also carries the disadvantage that if problems arise the homeowner may need to personally take action to make the issuer of the certificate repair or rebuild the damaged structure.

Anyone interested in purchasing a new home is well-advised to buy through a sales office that specialises in new homes and ensure they ask the adviser for information about the available structural insurance cover. They can also check out these details online to confirm that the property is eligible for a mortgage, in the process saving themselves a lot of time and hassle. No one wants to get excited about a new home only to be rejected for a mortgage because the property has no insurance.

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