Experts Urge Homebuilders to Insure Properties During Construction

Homeowners beginning new residential construction are being encouraged to arrange insurance from the early stages of building, as partially completed properties remain particularly vulnerable to theft, vandalism and weather-related damage.

According to Lendi, building a 120 sqm detached house in Poland to a mid-market finish now costs around PLN 560,000, with larger or higher-specification homes requiring significantly higher investment. Damage or theft during construction can therefore result in substantial additional costs and delays.

Lendi notes that many individual investors postpone purchasing insurance until construction is complete, despite the fact that the early stages of development often present the highest level of risk.

Potential risks during construction include the theft of building materials, fire, flooding, storm damage and vandalism.

Industry data cited by the company indicates that construction site crime remains a significant issue. According to the latest BauWatch Crime Report, 74% of construction companies in Poland experienced theft on construction sites during the past year, while 58% reported incidents of vandalism. In 40% of cases, these events led to delays in project completion.

Daria Skrzyszowska of Lendi Care said insurance should be considered an integral part of planning a residential development rather than a product purchased only after completion.

For projects financed through mortgages, banks generally require insurance during construction, typically covering fire and other insured events with the policy assigned as security for the lender. However, broader insurance options are available, including cover for construction materials stored on site, building equipment, temporary site infrastructure, theft and third-party liability.

Lendi also advises homeowners to review and update their insurance once construction has been completed. As a property moves from the construction phase to occupation, the nature of potential risks changes, making it appropriate to extend cover to include fixtures, fittings, household contents, building services and personal liability.

According to the company, maintaining insurance throughout both the construction period and the life of the property can help reduce the financial impact of unforeseen events while protecting what is often one of a household’s largest investments.