A report has predicted that the non-standard insurance market is set to experience significant growth between now and 2030. Non-standard homes are thought to be one of the key drivers of this forecasted upturn, with an anticipated compound annual growth rate of 1.6%. But what are they, and why are they gaining popularity?

Non-standard construction

Homes are classified as non-standard if they do not have a brick or stone wall and a slate or tiled roof. Instead, the properties have been constructed with alternative materials, such as concrete, timber or steel. Often, this is due to the resources that are available locally – for example, in the UK the materials used to thatch roofs vary depending on the area.

Benefits

Non-standard homes can be cheaper to buy and more environmentally friendly. For example, pre-fabricated, modular homes are made up of units that are manufactured elsewhere and assembled on site, thus reducing excess building waste by 52%. Buyers can also reap the sustainability benefits; modular homes are usually well insulated and tend to be more energy and water efficient, with households potentially saving up to £800 on energy bills each year.

Drawbacks

There are risks involved with buying a non-standard home, as the property could deteriorate at a faster rate due to the alternative materials used. Britain’s crumbly concrete crisis has highlighted this, with 234 schools and colleges in England confirmed to be unsafe because the buildings contain reinforced aerated autoclaved concrete (RAAC). Due to uncertainty regarding the longevity and reliability of some non-standard construction materials, it can be harder and more expensive to get a mortgage and suitable home insurance.

What’s in store for insurance?

Make UK expect that 30,000 modular homes will be built per year by 2030. But these are not the only kind of non-standard homes that insurers are having to account for. With Brexit making it harder to have a holiday home abroad, many are opting for second homes in the UK, thus requiring a tailored home insurance policy. Additionally, climate change is causing subsidence to become a more prevalent issue, with 6.5% of British homes expected to be at risk by 2030. More homeowners will therefore need a specialist policy to cover them. 

It is likely that, over the course of this decade, a gap in the market will be widening for insurance which protects non-standard homes. Insurers would therefore be wise to introduce products that cater for these alternative methods of constructing and living.