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An Important Announcement Regarding Structural Warranty Policies: Beware of the Risks

Posted 16 05 2023 by Darren

Recent consultations with local developers have revealed a concerning trend in the lack of transparency regarding policy details and exclusions in some structural warranty policies, currently being offered in the market.

It is imperative to understand that not all policies are created equal, and a thorough understanding of the coverage offered and any exclusions is crucial. Failure to check out the small print could mean that some policies will not provide the required levels of protection needed by many modern developers.

At Global, we prioritise transparency and only arrange comprehensive cover with a UK based, 'A' Rated insurer. We would urge all developers to ensure that they have similar warranties to avoid potentially expensive problems in the future.

As a founding member of the Consumer Code for New Homes, we have always aimed to promote best practices to protect both developers and homeowners, which is why we are concerned by this latest feedback.

Developers are telling us that certain wording relating to policy exclusions has not been immediately transparent. As a result, some developers were unaware of the exclusions and purchased policies with significantly less comprehensive coverage than they initially believed.

We would advise developers to know precisely which insurer their policy is with, their financial stability, where they are based and regulated, and what is covered and excluded. Before selecting a structural warranty, it is crucial to perform due diligence and carefully review all aspects of the policy.

For some developers, it is too late, and they now have inadequate coverage. For others, we have been able to highlight the differences and provide a more suitable solution. Often, what initially seems like a favourable and cheaper option turns out to offer significantly less cover with considerably more risk.