Tuesday the steel goes in, and she is still cooking in there
A 26 m² single-storey extension on the back of a 148 m² semi. The rear wall comes out, a steel goes over the opening on padstones an engineer has sized, the kitchen moves into the dining room on a two-ring hob for six weeks, and the family stays put because moving out for a job this size costs more than the job. The builder has priced it at 96,940 and starts in three weeks. The word insurance appears once in his quotation, in the phrase "fully insured", and the buildings policy renewed in March without anybody telling it the back of the house is coming off in September.
Almost everybody's first question is whether the builder is insured. It is the wrong first question, and wrong in an interesting way: his insurance is built to answer for his fault, and most of what can go wrong here is nobody's fault. A gale through an open roof at three in the morning. A fire in a neighbour's meter cupboard that spreads along the terrace. The copper and the boiler walking off site on a Sunday night. None of that is negligence, and a public liability policy pays what the insured is legally liable to pay — so on that list it pays nothing.
Two separate questions, answered by two separate documents. Who carries the risk of loss or damage to the thing being built and the thing it is fixed to: that is the insurance section of the building contract, and on an extension it lands somewhere most homeowners do not expect. And whether the household policy still responds once the structure is open: that is her own wording, which she has never read past the excess. Take them in that order — the first answer changes what you have to ask about the second. The figures below are one house; the arithmetic behaves the same in any currency.
Six things at risk on one site, and no single policy over any of them
The site holds a building she owns, a building she does not yet own, a heap of material whose ownership changes daily, a rotating population of trades, a neighbour's flank wall eight hundred millimetres away, and a footway the public walks along. Each belongs to a different policy, and the seams between them are where claims get argued rather than paid.
The material is the seam that moves. A roof truss on the drive belongs to the builder; nailed down, it is part of her house, because materials become part of the land as they are fixed to it, and the JCT forms deal separately with unfixed site materials and with when property in them passes. That boundary shifts every working day, which is why an extension is insured as one combined risk rather than two: you cannot draw a line on Tuesday that is still in the right place on Friday.
| The thing at risk | Whose it is | The policy that normally answers | How it goes uninsured |
|---|---|---|---|
| The house being lived in, and its contents | Hers | Her buildings and contents policy, if the wording still responds during structural work | An alteration condition she never read, or cover suspended from the day the wall opens |
| The part-built extension | Becoming hers as it is fixed | Contract works or builder's risk cover, in joint names | Nobody bought it, because each party assumed it was in the other's price |
| Materials delivered and not yet fixed | The contractor's until property passes | The same works policy; a homeowners form may carry a limited amount for alteration materials | Theft from an unattended site, or material stored off site and in transit |
| Injury to a visitor, or damage to the neighbour's wall | A third party's | The contractor's public liability | Her own house sits inside the care, custody and control exclusion |
| Injury to the people doing the work | The contractor's workforce | Employers' liability, or workers' compensation | A gang described as self-employed when the reality is employment |
| Damage next door with nobody at fault | The adjoining owner's | Non-negligent damage cover taken out under the contract | It is an opt-in entry in the contract particulars and it is usually left blank |
What number the works policy has to carry
The sum insured on the works is not the price she is paying. It is what it would cost to reinstate the work if it burned down the night before completion, and the two are close without being the same thing. Reinstatement includes clearing the debris of something that was never finished, and paying a designer to draw and administer it again. That second item is why the JCT contract particulars carry a blank for a percentage to cover professional fees against the insurance of the works — a blank the parties fill in between them, not a figure an article can hand you.
Build the contract sum from its parts rather than accepting a lump. Here the shell and fit-out of 26 m² comes to 67,600; the structural opening — beam, padstones, propping, calculations for building control — is 7,200 priced on its own; making good where new meets old is 4,800, being the floor levelled across the threshold, the junction re-plastered, the heating and ring main extended, two rooms redecorated. Fees are 5,400. Contingency at 15 per cent falls on the construction lines only, giving 11,940, with the fees outside it. The total is 96,940, printed as 96,900 — a medium-confidence result carried to three significant figures.
Two things before that number goes near a proposal form. Contingency is money that may never be spent, and a works policy reinstates what was there rather than what was budgeted, so contingency carried inside the declared value is premium paid on nothing. Going the other way: if the sales tax on a rebuild is not recoverable by her, the sum insured has to be gross of it, because that is what the invoice to put it back will say. And none of this figure has anything to do with the house it is bolted to. That is the other policy, and it is the harder one.
Use it to get a defensible works value rather than a total: the breakdown separates the shell, the structural opening, the making-good and the fees, and it is those lines — not the headline — that a broker or a loss adjuster will want to see behind a declared value. Set the contingency to zero for the insurance run and keep it where it belongs for the budgeting one; the two numbers answer different questions and only one of them gets reinstated.
New internal floor area, all storeys.
Your rate for the extension shell and fit-out.
Beam, padstones, temporary support, engineer.
Where new meets old.
Architect, engineer, planning and building control.
Fifteen percent minimum on an extension.
As it applies in your jurisdiction.
Total extension cost
Needs your Build rate (per m²)
This page does not assume a price. Enter yours and the answer appears here.
They open the calculator with your figures already in it
Home Extension Cost Calculator — shown in imperial, US market. The link sets both, so the result they see is the one on your screen.
What this calculation does not cover
- Excludes underpinning, which is a specialist operation priced by the linear length and is only known to be needed once trial holes are dug.
- Excludes diverting a public sewer, which requires the water authority's agreement and is priced by them.
- Excludes rehousing or storage while the work runs, which on a rear extension into the only kitchen is a real cost.
The option letters, and the awkward one is always the homeowner's
The JCT forms settle this with three lettered insurance options in Schedule 3, and the letters are worth knowing because a builder will quote one at you. Option A: the contractor takes out a joint names all-risks policy on the works, written for a new building on a clear site. Option B: the employer takes out the same cover. Option C: the employer insures the existing structures and contents in joint names, and separately the works in or extensions to those structures, also in joint names. The Minor Works Building Contract offers the identical choice. An extension is work to an existing structure, so it is Option C — the awkward one, and the one that puts the obligation on the person who has never bought a construction policy in her life.
The awkwardness is the market rather than the paperwork. Joint names on an existing dwelling means her household insurer has to accept the builder as a composite insured and give up its right to recover from him. Household insurers do not do that routinely and many will not do it at all, which leaves a domestic client contractually bound to buy something nobody will sell her. The JCT's 2016 editions recognised the problem and carry an alternative to Insurance Option C for a residential occupier who cannot obtain that cover; which version is in her contract is a question for the particulars in front of her.
The North American forms reach the same destination by another road. AIA A201–2017 puts the property insurance obligation on the Owner and sets its terms out in the Insurance and Bonds Exhibit to A101–2017, requiring builder's risk cover on a replacement cost basis for the contract sum plus subsequent modifications; A105–2017, the short form used on this size of residential job, does the same in fewer words. The underlying policy is usually an ISO builders risk form, CP 00 20, and the existing structure stays with the owner's property insurer unless deliberately endorsed onto it. Same conclusion as the JCT: on an alteration the owner buys the property cover.
Which makes three phone calls, all in the same week, because at least one will fail and the failure takes longer to discover than the builder's notice period allows. Her own insurer: will you continue cover, and will you add the contractor as a joint insured. The builder: do you carry contract works cover, does it extend to existing structures, whose name is on it. A broker who writes renovation risks: what does a standalone joint names policy over both cost for twelve weeks. One of the three usually works, and which one is not predictable from the outside.
| Arrangement | Who buys it | What it covers | When it applies |
|---|---|---|---|
| JCT Insurance Option A | Contractor | The works, in joint names, all risks | A new building on its own site |
| JCT Insurance Option B | Employer | The works, in joint names, all risks | A new building where the employer insures by choice |
| JCT Insurance Option C | Employer | Existing structures and contents, plus the works in or extensions to them, both in joint names | Every extension, conversion and refurbishment |
| The 2016 alternative to Option C | Employer, on agreed terms | A substitute arrangement where joint names on the existing dwelling cannot be bought | A residential occupier whose household insurer refuses |
| AIA A201–2017 with the A101 Insurance and Bonds Exhibit | Owner | Builder's risk on a replacement cost basis for the contract sum and modifications | US contracts on the AIA forms |
| Owner's property policy plus a builders risk form | Owner | The dwelling on the homeowners form; the works on CP 00 20 | US residential work, with the existing structure endorsed on only if asked |
Joint names is not a formality
Subrogation is the mechanism the whole phrase exists to switch off. An insurer that pays a claim steps into its insured's shoes and pursues whoever caused the loss. If her buildings insurer pays out for a fire the builder started, it will then chase the builder; the builder's liability insurer will defend; and the two of them will spend eighteen months arguing about a house she is not living in. The JCT defines a joint names policy as one that includes both parties as composite insureds and under which the insurers have no right of subrogation against anyone named as insured. That single sentence is the entire product, and it is why the phrase matters more than the limit.
Two English decisions are the ones cited on what such an insuring obligation does to the parties' liabilities: Scottish & Newcastle plc v GD Construction (St Albans) Ltd [2003] EWCA Civ 16, on an employer's obligation to insure existing structures in joint names, and Co-operative Retail Services Ltd v Taylor Young Partnership Ltd [2002] UKHL 17, on works insured in joint names under a JCT form. Both are quoted for the same proposition: where the contract allocates a risk to a joint names policy, that policy is the agreed route to compensation rather than the starting point of a claim between the insureds. So the arrangement's value is the argument it removes, and one that leaves the builder off the policy has bought the cover and kept the argument. Read the certificate for two phrases in particular — joint names, and existing structures — because a policy over the works alone is the common half-answer.
Telling her own insurer, and what the wording does if she does not
Nearly every household buildings wording carries a condition about structural alteration and some duty to report a material change in the risk. In the UK the consumer's duty is set by the Consumer Insurance (Disclosure and Representations) Act 2012 — to take reasonable care not to make a misrepresentation — with graded remedies: a deliberate or reckless misrepresentation is treated very differently from a careless one, which gets a proportionate remedy rather than a voided policy. None of that is a licence to stay quiet, because a condition about alterations is a term she agreed to keep, not a statement she made once at inception. The builder's own policies sit under the different regime of the Insurance Act 2015.
The American position differs, and differs helpfully. Under the ISO Homeowners 3 – Special Form, HO 00 03, Coverage A extends to materials and supplies located on or next to the residence premises used to construct, alter or repair the dwelling: alteration is contemplated by the form rather than excluded from it. The trap there is vacancy rather than construction. Vandalism and malicious mischief drop out where the dwelling has been vacant more than sixty consecutive days immediately before the loss — and the same form says a dwelling being constructed is not considered vacant. So the family staying put is, among other things, an insurance decision already made in her favour. Decamping for the messy eight weeks is the decision that needs a phone call first, and under a UK wording the unoccupancy period is set by that individual policy rather than by anything published.
One thing her household policy will almost certainly not do, whatever else it agrees to: pay for damage caused by the works. That exclusion is not a technicality an insurer might waive — it is the reason the works policy exists. And the realistic claim here is not a total loss, it is water through a roof that was felted but not tiled, down the party wall and through two ceilings that were fine that morning.
And there is a second interested party who never gets told. A mortgage requires buildings insurance to be maintained as a condition of the loan, so if the answer to "I am building an extension" is that cover is suspended or that perils fall away, that is not only an insurance problem. It is a breach of the mortgage conditions running quietly for twelve weeks.
- Whether cover on the existing building continues unchanged for the duration of structural work, and if not, on what terms — by email rather than on a call.
- Which perils are suspended or restricted while the structure is open, and whether any excess changes. Escape of water and storm usually move.
- Whether they will add the contractor as a joint insured. If not, get the refusal in writing: a broker pricing a standalone policy needs it, and it is what triggers the contract's alternative to Option C.
- Whether alternative accommodation cover responds if a loss during the works makes the house uninhabitable, and what it is limited to.
- Whether the sum insured changes now or at completion, and what has to be re-notified as the job changes. A variation adding a dormer is not the risk described in March.
Liability: the neighbour, the passer-by, and the man on the scaffold
Public liability pays what the contractor is legally liable to pay for injury to people and damage to third-party property. Two facts about it explain most of the misunderstanding on domestic jobs. It is not a works policy and it will never reinstate the works. And her house may be excluded from it altogether by the care, custody and control exclusion, which strips out property in the insured's charge. A builder entirely honest in saying he is fully insured for five million may be carrying nothing at all in respect of the building he is standing inside.
Employers' liability is the one with a statute behind it. In the UK the Employers' Liability (Compulsory Insurance) Act 1969 and the Employers' Liability (Compulsory Insurance) Regulations 1998 require cover of at least five million pounds and a certificate available for inspection, and describing a gang as self-employed does not remove the requirement where the relationship is employment in substance. The Act attaches to employers carrying on a business, and HSE's guide for employers sets out the exemptions. The US equivalent is workers' compensation, mandated state by state, where an owner engaging an uninsured trade can find the statute treating them as the employer. Either way: the moment she stops buying a finished job and starts directing individual people, her position changes and her household policy is not what covers it.
The neighbour is the exposure nobody prices. Extensions get built on boundaries, and under the Party Wall etc. Act 1996 work to a party wall and excavation near an adjoining owner's foundations need notice under sections 2 and 6, with section 7(2) making the building owner liable to compensate that owner for loss or damage resulting from work done under the Act. Note what that liability does not require: negligence. A public liability policy answering only where its insured is legally liable in tort therefore has a hole in it precisely where the neighbour is standing. The JCT's answer is the joint names cover at clause 6.5.1, insuring the employer's liability for damage to neighbouring property from collapse, subsidence, heave, vibration, weakening or removal of support or lowering of ground water, other than damage caused by negligence. It is an entry in the contract particulars, bought separately, and on domestic jobs it is left blank far more often than filled in.
One more allocation, because it decides who a liability insurer argues with. Under the Construction (Design and Management) Regulations 2015, regulation 7, the client duties on a domestic project pass to the contractor. That insures nothing; it settles who is answerable for the way the site is run, which is the first question asked after anybody is hurt on it.
- The insured's name against the name on the quotation and on the bank details. A sole trader, a limited company and a trading style are three different insureds.
- A period covering the whole programme including the overrun, not the fortnight in which the certificate was requested.
- Whether the limit is any one claim or in the aggregate — an aggregate is shared with every other job he has run since renewal.
- A trade description matching the work. General building against a structural opening, a scaffold and a torch on a flat roof is where an insurer starts asking questions.
- How existing structures and property in care, custody or control are treated, and what any hot work condition requires.
- The employers' liability certificate, requested separately. It is a different document and only one of the two is compulsory.
The sum insured moves twice, and the second move is the one that gets missed
Two events change the household policy and only one has anybody chasing it. At the start the risk changes character: same building, open to the weather, full of strangers, carrying a scaffold. That is a notification, and the insurer either accepts it or does not. At the end the building is a different size, which is an arithmetic change to the declared rebuild figure — and that one has no prompt attached to it. The builder has gone, the skip has gone, and renewal is seven months away.
The arithmetic is not complicated, which is precisely why it gets skipped. The house was 148 m² and is now 174: in the units the rate is quoted in, 1,593 square feet becoming 1,873. At an illustrative rebuild cost of 150 per square foot — replace it with one a local builder will stand behind, because this site publishes no rate table — the runs give 238,959 and 280,938, a difference of 41,979. Two mechanics before typing. The rate field is read as cost per square foot however the metric switch is set, so a rate quoted per square metre has to be divided by 10.764 first. And the result is low confidence, so the headline rounds to two significant figures: those runs print as 240,000 and 280,000, a difference of 40,000, two thousand short of the real gap. Open the calculation logic and take the final result line.
Then be honest about what one blended rate is doing. A 2026 extension built to current thermal, structural and drainage standards does not reinstate at the same cost per square foot as the 1930s two-thirds it is joined to, and a single rate across both is a compromise rather than an answer. Nor does area times a rate include debris removal, professional fees or the cost of rebuilding to the code in force at the time of the loss. Past a certain size the right instrument is a professional reinstatement cost assessment to the RICS standard, using rebuild cost data from the RICS Building Cost Information Service — where the Association of British Insurers points householders too. This figure is the sanity check on that assessment, not a substitute for it.
Run the finished floor area — existing plus the new work, measured off the completion drawings rather than remembered — against a rebuild rate you would defend to a loss adjuster, and hold the result beside the figure the policy schedule currently carries. The gap between them is what the extension quietly added to the risk without anybody re-declaring it.
The total conditioned floor area of the home.
The cost to rebuild from scratch in your area, per square foot.
House area
1,600 sq ft
Figures that depend on a rate wait for yours — this page does not assume one.
They open the calculator with your figures already in it
Homeowners Insurance Replacement Cost Calculator: 1,610 sq ft — shown in imperial, US market. The link sets both, so the result they see is the one on your screen.
What this calculation does not cover
- This is a dwelling figure and not a policy. Personal property, detached structures — garage, shed, fence, pool, driveway — and the cost of living somewhere else while the house is rebuilt are separate coverages, generally written as a percentage of the dwelling limit rather than priced from anything on this page. Insuring to this number covers the shell and nothing that was inside it or standing beside it.
- The dwelling limit this feeds also sets what you pay before the policy does. Wind, hail and hurricane deductibles are commonly written as a percentage of that limit rather than a flat sum, so a 2% deductible against a 400,000 limit is 8,000 out of pocket on a claim, and every increase in the limit raises that deductible with it.
A rebuild happens at the prices of the year it happens in
The sum insured she sets in October has to survive the rest of the policy year and then the claim. Take the unlucky version: a fire in month eleven, then a loss adjuster, a scope, a design, a consent, a tender and a build. Two years between the fire and the last coat of paint is an ordinary assumption on a house this size, and the money is spent at month thirty rather than month zero. Carry the 280,938 across thirty months at an assumed 4 per cent a year and it lands near 310,400 — roughly 29,500 the policy would not have had, on a figure that was right the day it was written. Closing that gap is what index-linking exists for, commonly against the BCIS House Rebuilding Cost Index. Neither it nor its commercial cousin, day-one reinstatement on a declared value, is automatic.
Two cautions on the escalation figure. There is no index behind the percentage field — whatever rate you type is the rate you get — so the defensible source is a published construction cost index for the region rather than a number that felt about right, and a rate observed across two years has to be converted to a per-year figure first. And the annual percentage is divided by twelve and compounded monthly, so 4 behaves like about 4.07 over a full year: immaterial at this scale, and worth knowing before setting the output beside a published annual index.
Put the rebuild figure in as the original price and set the months to the remainder of the policy year plus a realistic period from loss to completion — not to the build programme alone, because the adjusting, designing and consenting happen at the front of it and cost money at the end of it. The gap between what goes in and what comes out is the argument for index-linking, in a number.
The price from an old quote or estimate.
How many months have passed since the quote was given.
Your assumed yearly rate of change for this material category.
Estimated current price
$10,512
This assumes a steady compounding rate, but real material prices (especially lumber, steel, and copper) often move in sharp, unpredictable swings rather than smoothly — get a fresh quote for anything time-sensitive.
- Total change
- $511.62
They open the calculator with your figures already in it
Material Price Escalation Calculator: 10,512 $ (estimated current price) — shown in imperial, US market. The link sets both, so the result they see is the one on your screen.
What this calculation does not cover
- Months Since Quote is held between 1 and 120 and an out-of-range entry is clamped to the nearer end when you leave the box, so a quote three weeks old has to be pushed up to a full month and one eleven years old is escalated as though only ten years had passed.
- The rate field accepts nothing below -20% or above 50% a year and the original price stops at $1,000,000, so a timber line that doubled since it was priced, or a seven-figure supply package, has to be broken into stages or separate runs before the figures will go in.
- Two numbers come back and no more, the escalated price and the dollar difference from the original, with no month-by-month schedule underneath, so there is nothing showing how much of the rise accumulated in the first year against the last.
- The old price is simply multiplied out, with no currency term anywhere in the arithmetic, so a quote issued in another currency carries whatever the exchange rate has done since it was written entirely outside this answer.
- Nothing separates months already gone from months still ahead of you, because the figure you type is used only as an exponent, so escalating to a delivery date some way off means adding that lead time into the months yourself.
Practical completion is an insurance event nobody diarises
The works cover ends. On the JCT forms the insurance of the works runs to practical completion or earlier termination, and from that moment the new work is part of the building — which means the buildings policy has to be carrying it. If the insurer has not been told the house got bigger, a gap opens the day the scaffold comes down, of very nearly the value of the new work. That is the worst-shaped exposure here: not a refusal to pay, but a sum insured that has quietly stopped matching the building, and it will not surface until somebody measures the house after a fire.
The defects liability period is not an insurance period, and the two get confused because they run consecutively. A contractor returning in month six to cut out a cracked lintel is doing contract work inside a finished building, and the property cover over that building is hers, not his. Ask before he comes back whose policy answers if he damages something putting the defect right, and whether his works cover has any tail at all after completion.
Last, a guarantee and an insurance policy are different objects sold with similar words. A workmanship guarantee is worth what the builder is worth in the year you need it; an insurance-backed guarantee, or a structural warranty bought for the extension, is a policy with an insurer behind it and a scope you can read. Most domestic extensions have neither unless somebody buys one. In some jurisdictions the choice is made for you: the Home Building Act 1989 in New South Wales requires cover under the Home Building Compensation Scheme for residential building work above a contract value threshold set by that scheme, before any deposit is taken.
- Tell the buildings insurer the works are complete on the day they complete, and change the sum insured and the property description in the same conversation rather than at renewal.
- Check what else in the rating basis moved — room or bedroom counts, storeys and flat roof area are all rated on by some insurers.
- File the building control completion certificate, the structural calculations, the electrical certificate and any gas notification together. An insurer looking at a subsidence claim in ten years wants the first two; a buyer's solicitor wants all four sooner.
- Read whatever guarantee or warranty exists for whose name is on it and whether it survives a sale.
- Keep the party wall award and the schedule of condition with the deeds. The schedule is the only evidence of what the neighbour's wall looked like before the dig.
Five numbers and three phone calls, before the rear wall opens
The workspace opens on the replacement cost calculator with the finished floor area already in it, and the extension cost and escalation tools stacked beneath. Every rate is yours to type over: the figures in the article are one house, and no rate on this site is a market quotation.
- The finished floor area, measured rather than remembered — Existing gross internal area plus the new work, taken off the completion drawings. This is the term that changes on an extension and the one nobody re-enters, because the policy schedule has carried the same number since the house was bought.
- The works value, gross and with fees on top — Reinstatement of the part-built work, plus clearing the debris of it, plus the professional fee percentage the contract particulars leave blank for the parties to fill in. Not the budget: contingency that has not been spent does not get reinstated.
- Which insurance option the contract actually uses — The letter, in writing, before signing. An extension is work to an existing structure, which puts it in Option C territory on the JCT forms and on the owner under the AIA forms — and both of those mean the client, not the builder.
- Your own insurer's answer, in an email — Cover continuing or not, perils suspended or not, joint names accepted or refused. A refusal in writing is worth as much as an acceptance: it is what a broker prices a standalone policy against and what the contract's alternative arrangement is triggered by.
- The certificates, read against the quotation — Insured name, period, limit per claim rather than in the aggregate, trade description, and how existing structures and property in care, custody or control are treated. Employers' liability is a separate certificate from public liability.
- The date the works cover ends and the buildings policy takes over — Practical completion, diarised. The sum insured and the property description both change that week, and nothing in the process reminds anybody — the builder has left and renewal is months away.
Opens the calculators above on one screen with the dimensions from this article already filled in. Quantities only — this site publishes no price list, because local prices vary too much to publish honestly.