What Is Clause 6.5.1 Insurance?
Clause 6.5.1 insurance covers the risk of damage to a neighbour’s property while your project is going on next door, such as a:
- new build
Clause 6.5.1 covers fairly minor problems such as cracking to neighbouring properties.
It also covers more serious problems such as subsidence, which could need significant sums to put right.
Clause 6.5.1 used to be known as 21.2.1 and is a form of insurance from the Joint Contracts Tribunal (JCT).
How Well Known is This Form of Insurance?
Most people are blissfully unaware of it. They assume that household insurance will cover all aspects of a structural extension, but this is not the case. They may also assume that the insurance of their architect or contractor covers this problem, but this is not true.
When Will I Need to Take out This Insurance?
A good rule of thumb is: if you need a Party Wall Agreement, you should be looking for this type of insurance. You would also consider this insurance if you were doing deep piling or deep excavation work. Deep piling can cause damage up to a street away because of the vibrations caused by putting up the piles.
For detached houses, there are no hard and fast rules, so you could speak to your contractor for advice about the possibility of damage to a neighbour’s garage, property or outbuildings.
How Long Will the Cover Last?
It’s designed to cover the build process and just afterwards, as any damage or cracking should be picked up quickly in a few weeks or months.
Must I Take out Clause 6.5.1 cover?
There is no legal requirement for any insurance on a self build or renovation. In fact, not very many take up this cover, and it’s not the cheapest. But you need to weigh up the costs of the cover compared with the potential costs of dealing with the damage to a neighbour’s property caused by your works.
If you employ an architect, they will usually tell you if they think this cover is required for your particular build.
How Much Will I pay for Clause 6.5.1?
For a £150,000 project, you can expect to pay between £1,500-£2,000 for this cover.
The cost is similar to that for structural warranty cover.
When Should I Take out Clause 6.5.1 Insurance?
You need to take it out before you start, as no insurer will insure you for a project half way through. I also suggest that clients take photographs before work starts of any existing damage in a neighbour’s property, because sometimes neighbours claim for damage that already exists. This is something that insurers often insist on.
Andrew Reardon specialises in self-build insurance products for ProAktive Self Build
Read more about the insurance you need for a self build or renovation project