The Danger of Switching Back Too Early
As your building project nears the finish line, it’s natural to want to save money by switching from your building project insurance to a standard home or property owners policy. But making this move too soon can be a very costly mistake.
If your project hasn’t reached practical completion, a home insurance policy will almost certainly not cover you – and you could be left completely uninsured if something goes wrong.
What Is Practical Completion?
Practical completion is a formal milestone in the building process. It means the works are complete enough for the building to be used for its intended purpose, with only minor defects or snagging items remaining.
It is usually confirmed by:
- A certificate issued by your architect, contract administrator, or building control officer
- An official sign-off stating that the building complies with regulations and is safe to occupy
Without this certificate, insurers will not treat your building as finished – no matter how close it may look.
Why Switching Early Is Risky
Standard home or property owners policies are designed for finished, occupied buildings. They do not cover:
- Ongoing construction work
- Unfinished structural elements
- Increased risks such as missing balustrades, incomplete staircases, or open balconies
If you switch early and a loss occurs – even something unrelated to the incomplete works – your claim could be rejected on the basis that the property wasn’t complete.
Real-World Example
A property owner switched to a standard home insurance policy while waiting for a delayed balcony balustrade to arrive from overseas. Before the balustrade was fitted, a modem that overheated caused a fire that damaged part of the building. The insurer refused the claim because practical completion had not been achieved. The repair bill came to over £20,000 and voided the home cover.
Extending Cover for Projects That Overrun
Very few building projects finish exactly on schedule. Delays due to weather, material shortages, labour issues, or design changes are extremely common – and insurers are used to it.
If your project will run beyond the original completion date:
- Contact your insurer as soon as possible – don’t wait until the policy is about to expire.
- Most insurers will extend cover for a straightforward time overrun on a pro-rata premium basis.
- If the cost of works has increased during the build, the insurer will recalculate the premium to reflect the new insured value.
Failing to extend your policy in time could leave the site uninsured as all cover ceases from the moment the original policy expires.
Updating Insurers on Changes to the Build
It’s not just time extensions that matter – you must also tell your insurer if:
- The specification of works changes (e.g., you add an extension, upgrade materials, or change the roof type)
- The total cost of the project increases
Why? Because your policy is based on the details you provided at the start. If the works are now more expensive or technically different, your insurer needs to know to ensure the sum insured and cover remain accurate.
If you don’t update them, you risk being underinsured, which could reduce any claim payout.
When to Switch
You should only move to a home or property owners policy after:
- Practical completion has been officially confirmed in writing
- All significant works are finished and certified
- Any remaining tasks are truly minor and don’t affect the building’s safe use
The Cost of Getting It Wrong
Switching too early doesn’t just risk losing cover – it could leave you with a complete rebuild cost if a major loss occurs. Fires, floods, or burglaries don’t wait until your paperwork is in order.
Compared to the potential loss, the premium for keeping your building project policy in place for an extra month or two is a small price to pay.
Key Takeaways
- Practical completion is the official point at which your building is considered finished.
- Without it, a home insurance policy will not protect you.
- Projects that overrun need policy extensions – arrange these before your policy expires.
- Always update your insurer if specifications or costs change during the build.
- Extending your building project policy is far safer than risking being uninsured.
Not sure when to make the switch or how to extend your cover?
Call 01825 745 410 – every call is answered by a qualified advisor.
Email enquiries@jctinsurance.com for a fast, personal response.