House Extension and Insurance: What You Need to Know Before You Build
Building an extension changes your home's value, its physical structure, and its risk profile — and most standard home insurance policies are not designed to cover a property under active construction. Failing to inform your insurer before work starts can invalidate your cover at exactly the moment you're most exposed.
Tell Your Insurer Before Work Starts
Your home insurance policy was issued based on the property's condition at the time it was taken out. Significant alterations — particularly those involving structural works, temporary exposure of the building fabric, or changes to the reinstatement value — are typically material changes that must be disclosed to your insurer.
When you inform your insurer of the planned works, they may: continue your cover with no change; add a premium or endorsement to cover the works period; exclude certain risks during the construction phase; or ask you to arrange separate contract works insurance for the construction period.
If you don't tell them and something goes wrong — a fire, flood, or structural failure during the works — your claim may be refused on the basis that you failed to disclose a material change in risk.
Contract Works Insurance
Contract works insurance (also called Contractors All Risk insurance) covers the works themselves — the physical fabric being built — against risks like fire, storm, theft of materials, and accidental damage during construction. On a residential extension, this is typically the contractor's responsibility to arrange.
Before work starts, confirm with your contractor that they carry appropriate contract works insurance and ask to see evidence of it. The minimum you should expect is: public liability insurance (typically £5–10 million); employer's liability insurance (if they employ staff); and contract works or all-risk insurance covering the works themselves.
After the Works: Updating Your Policy
Once the extension is complete, your home's reinstatement value — the cost of rebuilding it from scratch — has increased. If your buildings insurance is not updated to reflect the new value, you are underinsured. In the event of a total loss, your insurer may apply average — paying only a proportion of your claim that reflects the proportion of the true reinstatement value that was declared.
After practical completion, contact your insurer to update the declared reinstatement value. A RICS-qualified surveyor can provide a formal reinstatement cost assessment; for smaller extensions, your contractor can typically advise on the approximate build cost to add to the existing reinstatement figure.
Listed Buildings and Conservation Areas
Properties in conservation areas or with listed status may have higher reinstatement values than comparable unlisted properties because of the requirement to use traditional materials and methods. Standard buildings insurance valuations for these properties are frequently underestimated. It's worth commissioning a specialist assessment.
RCB can provide clients with build cost information for insurance purposes on completion of extension works. We also support clients in understanding their insurance obligations during the construction phase as part of our pre-construction briefing.
07359 872594 | contact@rcbgroup.co.uk | www.rcbgroup.co.uk