Insurance for building house extension - help!

[tallulahdula]

A slightly dull aspect of an exciting project. We are starting a kitchen extension in a months time. Got all the permissions etc and I've informed our home insurance company of the works. However, what they don't cover, and what I'm after is insurance for if the builder goes bust half way through the project.

Has anyone else bought some of this insurance and if so could you recommend a company? I've not had much luck looking on the net and even my home insurance people couldn't help.

Any help is much appreciated.......thanks all.

We never even considered this. However what you need to do is stage payments to the builder. Do not pay for anything in advance if you can help it. You could even pay the builder's suppliers direct if you are worried. Do you have a reason to be worried? We have had various building projects and never had a problem. Just agree when you will make payments and what is covered. Eg after foundations, after walls constructed, after windows and roof done etc. Talk to the builder about how he wants to buy materials. When he has paid for them, you pay him for example. You do not have to pay loads in advance but you should be reasonable about what you pay and when. Always keep about 10% back for the final payment to be paid when you are totally satisfied and all the snagging jobs are complete. So many builders leave the job and start another before everything is done.

The bigger problem we have always found, is extras. What no-one has thought about, or knows about, in advance. What exactly is underground when the builder starts digging??? Also upping your specification - at extra cost. You need a cushion of money available for unforeseen expenses - 10% say.

When your extension build gets going, you will have other things to think about and it is a constant whirl of decisions. I would put his financial security to the back of your mind unless you already have suspicions. Ask him to put you in touch with previous clients if he has not already done so. Then you can ask about stage payments, satisfaction, clean working, completion of the job on time (so much else to go wrong.....). Just remember your wonderful kitchen is waiting for you.

Thanks Milly! Some good advice there. We have had building works on previous houses and like you would never have thought to get additional insurance. This is our forever house and we moved in about a year ago. At the same time the family across the road were having an extension and their builder went bust just before the roof went on. We helped out as much as we could, but my poor neighbour was distraught and it was a nightmare for them. They are still trying to sort it out now.

Ours is a big project and I want to cover all eventualities. We are using a different builder and I do have faith in them. They are very organised and have given us the stage payment document, building schedule, spec of what exactly will be done at each building stage etc.

We have also seen previous work of theirs and chatted to the former clients who were happy with them? Maybe I am being over anxious?

If you have made staged payments then even if he did go bust, hopefully you won't have paid for lord work than he has done, so you should have money left to pay another builder to finish it. We had an extension done last year and have to say I didn't think of this to worry about and I'm the worlds greatest worrier

Hi talullah - I do think you are over worrying but I can see why based on your neighbour's experience. It does sound like your builder is organised. It would not be a good experience to have to find another builder mid job, but this is rarely needed. As long as a builder has had regular work and completed it to a high standard, then you should be ok. The builder apprears to have traded through the depression and is still trading - that is a good indicator too. (Believe me - many folded). I think the problem with insurance would be that the insurer does not have the builder's financial details so how can they judge what the risk is, any more than you can? Insurance is all about probability and risk. I am sure everything will be fine!

Thanks everyone. You have put my mind at rest esp Marmite: good points. Getting excited now

Sounds exciting