In the backend of 2018, we saw the insurance market transition from the longest soft market in living memory to a hard market.
In a ‘Soft Market’, Insurance Companies look to expand their market share, opening their availability to take on new business, enter new markets, reduce premiums and offer attractive policy wordings.
In a ‘Hard Market’, premiums begin to increase and the capacity for most types of Insurance decreases. Ultimately meaning that Insurers take a step back, re-evaluate their books of business, stringently underwrite new business, tighten policy wordings, and increase premiums.
This can also mean that Insurers pull away from specific insurance ‘markets’ entirely, which we saw happen En masse. With the Lloyd’s of London giving Insurance Syndicates an ultimatum to either pull out of the market or to agree a new business plan with Lloyds – involving higher premiums. As a result, we saw the likes of AM Trust, Canopious & Allianz cease to offer Latent Defect Insurance Capacity – severely impacting several Warranty providers, causing closure and/or inability to accept new business for prolonged periods of time.
What this means
The warranty provider will have agreed a cut-off date with the insurer, meaning that no new quotes can be issued after the agreed date and quotes that have reached the expiry date will not be able to be extended and/or accepted. Any business accepted up until the cut-off date (or quote expiry date) would proceed as normal with the insurer.
In the background is it likely that there was a run-off period, a period in which any site(s) would need to complete completion by for the Insurer to issue Final Certificates. If the site was to overrun and exceed this date, alternative cover would need to be found.
Whilst, most of the affected Warranty providers have found alternative Insurers for new business, it is likely that there is a reluctance to provide retrospective cover on these sites, never mind agreeing to honour the terms offered by the previous Insurer – even though the Warranty provider will have conducted a thorough Technical Audit throughout the Build.
The Elephant in the Room
- You have likely paid, in full, for the Warranty and are likely to only received a refund in the Insurance Premium & IPT – which potentially could only be 50% of total cost.
- COVID – whilst 2-3 years may seem a long time, the best part of 2 years were affected by the lasting effects of a World-Wide shut down, slowing down, even stopping project developments.
- You have sales waiting, losing money every day you can’t complete.
What can I do as a Builder/Developer?
At Advantage we specialise in working with clients and contractors who have been let-down elsewhere. Whether this for a disagreement over arduous technical standards or the unfulfillment of the Structural Warranty provision.
- Request copies of all your Structural Warranty Inspection reports from your provider.
- Contact one of our Relationship Managers at Advantage on 08459003639 or firstname.lastname@example.org . We have offices in all corners of the UK, so you will be provided with local account management and a local surveyor.
- Receive your quotation & Instruct AHCI to provide the Warranty on your site
- We will conduct a Technical Audit review & survey your site.
- We issue Final Certificates
For a project at completion stage, we can issue Final Certificates within a week from initial discussion.
The most important thing is time, the quicker we are instructed to work for you:
- The cheaper the cost
- A surveyor on site as soon as possible
- No lengthy delays awaiting sign-off
- Happy homeowners!
Are you accepted by the Banks & Building Societies.
Yes! A full list can be seen on our website – https://ahci.co.uk/approved-lenders/ – our guaranteed acceptance applies for approx. 95% of the mortgage market!