New Build Home Insurance

StarWish96

I am in the process of purchasing a New Build property which is not due to built until June 2022. 
We are getting very close of exchanging contracts, however the mortgage lender requires us to have buildings insurance that covers subsidence and groundflooding before they can be exchanged. 

I am struggling to find an insurance provider who will insure when it hasn't been built yet. Does anyone have any further advice on this of what I need to do?

There has already been a few posts in the past about this on the forums but there isn't a clear answer.

Thank you!

AFF8879

You only need to insure new builds from completion, not exchange. Though it’s possible your solicitor/lender has used some boilerplate language which says the latter (which is standard when buying a pre-existing property) - maybe worth clarifying this with them

canaldumidi

StarWish96 said:

.., however the mortgage lender requires us to have buildings insurance that covers subsidence and groundflooding before they can be exchanged. 
....

Has the lender told you this themseves, in writing? And does that same letter make clear they are aware it is a new build?

Or has this been passed to you via their (your) solicitor?

If the former, call the lender to clarify it's a new build and ask why insurance needed from Exchange

If the letter, call the solixitor and make sure thy've not just sent a standard requirement applicable to non-new builds.

user1977

StarWish96 said:

 the mortgage lender requires us to have buildings insurance that covers subsidence and groundflooding before they can be exchanged. 

No they don't. After all, at the point of exchange your house might still just be a muddy field. Somebody has got the wrong end of the stick. 

Probi

We are at a similar stage in purchasing a new build, out mortgage advisors have set us up with a policy that we have not yet provided a start date for, this is so that we can happily say to our lender that we have insurance in place. But nearer the time I am going to take out my own policy and not start the other policy, as the one provided is pretty expensive.

As everyone above has said though, with a new build you do not need to insure until completion anyway.

user1977

Probi said:

We are at a similar stage in purchasing a new build, out mortgage advisors have set us up with a policy that we have not yet provided a start date for, this is so that we can happily say to our lender that we have insurance in place. But nearer the time I am going to take out my own policy and not start the other policy, as the one provided is pretty expensive.

As everyone above has said though, with a new build you do not need to insure until completion anyway.

Sounds a complete waste of time, money and effort. Who in the process is failing to understand what actually happens for new build purchases? The builder insures until completion. If something terrible happens before then, nobody else bears risk. 

Runningmad

We were in exactly same position no one would insure us they wanted to know all sorts of questions that we just couldn't answer. Spoke to sales office and they said its covered on their insurance until completion.