Although the construction of a new home entails a high financial cost and each stage of construction involves real risks, many people mistakenly believe that insurance is conditional on a use and occupancy permit.

“A home under construction can be insured from the moment the building envelope has been erected and closed, i.e. the windows and doors have been installed and, of course, the building permit has been obtained. As a rule, a house under construction can be insured against the basic risks, which means that protection applies against fire, water, natural disasters and theft,” explained Dagmar Gilden, Home Insurance Product Manager at Seesam.

Oil rag or pair of work trousers can set house on fire

According to the insurer, the most costly and large-scale losses to homes under construction is attributable to water leaks and fires. The former ones often occur after the piping has been installed, due to both defective products and installation mistakes. The last largest water leak was caused for a Seesam customer by a substandard connection point and that loss amounted to 26,000 euros.

“It may sound unbelievable, but on quite a few occasions we have compensated for a loss caused by an oil rag or working clothes that were exposed to air after oiling the floor. There have been cases in both private houses and apartments, with losses running into hundreds of thousands,” said Gilden.

Fires in buildings under construction can also start, for example, from work involving an open flame on the roof, and sparks from welding, cutting or other hot work can set fire to highly flammable materials such as wood, paper, chemicals, etc. Temporary electrical wiring, incorrectly connected cables or defective tools are all to blame for short circuits which, in turn, have caused fires. It is also not uncommon for overloaded sockets or extension leads to catch fire during construction. During the winter period, builders often use temporary heating solutions which, if incorrectly installed or placed near flammable materials, also cause fires.

“Battery-powered tools and household appliances, which are brought into the household right at the start of the construction work and which can overheat or explode if left on the mains, are also a big risk,” the insurer mapped the hazards that can cause fires at the construction site.

Thieves leave with parquet and tools

In addition to the above, buildings at any stage of construction are also a desirable target for thieves, who particularly value tools, as they can be easily sold and turned into cash. But the items stolen also include parquet packages, insulation, wiring and toilet bowls waiting to be installed.

According to Gilden, unfortunately, a homeowner’s diligence and foresight do not always protect against the unexpected. Although insuring a building under construction is somewhat more expensive than insuring a completed home, according to her this cost is still many times less than constructing the entire building from the very start again. The exorbitant sums of money spent on the latter are probably all too well known to new home builders.

“I always advise prospective homeowners to contact an insurer right at the start of the construction work to advise them on when and on the basis of which information insurance cover can be provided. Make sure to insure before the house is fully completed and a use and occupancy permit has been obtained, because unfortunately even brand new homes catch fire and be the cause of flood,” Gilden recommended.