Home Insurance · UK Research · 2026

Granny annexe home insurance

A granny annexe is rarely covered by silence. Where the annexe sits on the same title as the house and a family member lives in it, most UK insurers will extend the existing buildings and contents policy to include it — but only once you tell them it exists and the rebuild figure is adjusted. Where the annexe has its own address, its own title, or a paying tenant, it usually needs a policy of its own.

When it’s covered Home insurance hub

Quick answer

The essentials in 30 seconds

Usually an extension of your existing policy, not a separate one — provided the annexe shares the main property’s address and title and is occupied by a relative.
It must be declared. An annexe changes the rebuild cost, the bedroom count and often the occupancy of the property — all material facts.
Outbuildings cover is not annexe cover. The outbuilding limit on a standard policy is designed for sheds and garages, not habitable accommodation.
A separate address, separate title, or a paying tenant generally means a separate policy — often let property or landlord cover rather than household.

General guidance drawn from mainstream UK insurer policy documentation and published local-authority and planning guidance. Information only — not a quote and not advice.

Cover at a glance

What decides whether your policy stretches to the annexe

Insurers do not really assess an annexe on whether it is attached to the house. What they look at is whether it is legally and practically part of the same home — one title, one address, one council tax arrangement, shared services, and occupied by the household or a family member. An annexe that answers yes to those is normally treated as part of the insured building. The further it drifts towards being an independent dwelling, the more likely it is that a household policy stops being the right product for it.

Situation	Typical insurer position
Attached annexe, same title and address, relative living there	Usually added to the existing buildings and contents policy once declared
Detached annexe in the garden, same title, relative living there	Commonly accepted, but more insurers decline — expect specific questions
Annexe with its own postal address and separate title deeds	Generally treated as a separate property needing its own policy
Annexe let to a tenant or short-term guests for payment	Household cover normally stops — landlord or let property cover applies
Annexe owned by someone other than the homeowner	Usually cannot sit on the homeowner’s policy at all
Timber, modular or park-home style unit without permanent foundations	Often outside standard cover — frequently a specialist insurer question
Annexe standing empty between occupants	Unoccupancy conditions can bite — cover may narrow after a set period
Annexe still under construction	Usually needs the builder’s cover or a renovation extension, not standard household

Indicative of mainstream UK policy wordings in 2026 — individual insurers differ, and some decline annexes outright. Your own schedule and wording govern.

What moves the price

Why adding an annexe usually changes the premium

An annexe adds insured floor area, a second kitchen and bathroom, and often a second set of contents belonging to a different person. That combination raises both the rebuild cost and the claims exposure — escape of water in particular, since a second bathroom and kitchen roughly double the number of places a leak can start. Most of the price movement comes from the sum insured rather than from any annexe-specific loading, which is why an accurate rebuild figure matters more than shopping for an “annexe policy”.

Factor	Typical effect on a household policy
Rebuild cost including the annexe	Main driver — understating it risks proportionate settlement of any claim
Second kitchen and bathroom	Raises escape-of-water exposure, the most common large domestic claim
Contents belonging to the annexe occupant	May need its own sum insured, or a separate contents policy in their name
Construction type of the annexe	Standard brick and tile prices normally; timber or modular often does not
Detached vs attached	Detached is more likely to be queried, excluded or referred
Occupancy by a non-family member	Usually moves the risk off household cover entirely
Security and access arrangements	A separate entrance and its own locks are normally underwriting questions

Directional guidance only — not a quote. We do not publish premium figures for annexes because pricing varies too widely by insurer, construction and occupancy to be meaningful.

If the annexe is timber-framed, modular or otherwise unconventional, the questions overlap heavily with non-standard construction home insurance. For the underlying split between the structure and what is inside it, see buildings and contents insurance, and the average home insurance cost in the UK gives the wider price context.

The paperwork trail

Planning, council tax and why insurers ask

Insurers care about the annexe’s legal status because it determines whether the property is one dwelling or two. Most councils approve annexes on the basis that they remain ancillary to the main house — part of the same household, not separately sold or let. Where an annexe is built under permitted development rather than full planning permission, that ancillary condition is usually strict: no separate postal address, and no independent letting or sale. Building regulations approval applies to any annexe intended for sleeping accommodation, whether or not planning permission was needed.

Council tax runs on a parallel track. The Valuation Office Agency may band a self-contained annexe separately, which produces a second bill. Since April 2014 an annexe occupied by a relative of the people in the main house has generally attracted a 50% reduction on that annexe bill, and a full exemption — Class W — applies where the occupant is a dependent relative, broadly someone aged 65 or over, severely mentally impaired, or substantially and permanently disabled. An annexe left unoccupied and unable to be let separately because of a planning restriction may also be exempt. None of this changes your insurance directly, but a separately banded annexe is exactly the sort of thing an underwriter treats as evidence of a second dwelling, so it is worth mentioning when you declare it.

Declare the annexe in writing. A phone note is fine, but keep the confirmation — it is the evidence that the insurer accepted the risk as described.
Get the rebuild cost reassessed. Include the annexe rather than assuming an existing figure absorbs it; a professional reinstatement assessment is the cleanest route.
Check who insures the annexe contents. A parent’s possessions may or may not count as household contents depending on the wording — ask specifically.
Confirm liability cover extends to the occupant. If a relative living in the annexe is injured, whose policy responds is a question worth settling before it arises.
Revisit it if the occupant leaves. An empty annexe, or one that becomes a holiday let, is a different risk from the one you originally declared.

Common questions

Granny annexe insurance FAQs

Do I need separate insurance for a granny annexe?

Usually not. Where the annexe shares the main property’s address and title deeds and is occupied by a relative, most UK insurers will extend the existing buildings and contents policy to cover it once it has been declared and the rebuild figure updated. A standalone policy tends to become necessary in the other cases — a separate registered address, separate title, an owner other than the homeowner, or a paying tenant — because at that point the annexe behaves like an independent property rather than part of your home.

Is a granny annexe automatically covered by my home insurance?

No. Nothing about an annexe is automatic, even when it is physically attached to the house. Insurers underwrite the property they were told about, and an annexe changes the rebuild cost, the number of bedrooms and kitchens, and often who is living at the address. All of those are material facts. An undeclared annexe gives an insurer grounds to reduce a settlement or decline a claim, and the problem is not limited to claims involving the annexe itself.

Does my outbuildings cover include the annexe?

Generally not in any meaningful way. Outbuildings cover is written for sheds, garages, greenhouses and similar structures, and it carries its own inner limit that is modest by comparison with the cost of rebuilding habitable accommodation. Some policies also restrict what can be stored in an outbuilding and exclude anything used as living space. Relying on an outbuilding limit for an annexe usually leaves a substantial shortfall, which is why insurers ask for the annexe to be added to the buildings sum insured instead.

What happens if I rent the annexe out?

Letting the annexe to anyone who pays rent normally takes it outside standard household insurance. Once there is a tenancy, the risk is a letting risk, and insurers generally expect landlord or let property cover — which addresses things a household policy does not, such as liability towards a tenant and loss of rent. Short-term or holiday letting is treated differently again; our guides to Airbnb host insurance and landlord buildings insurance cover those positions. Letting may also breach a planning condition requiring the annexe to remain ancillary to the main house.

How does an annexe affect the rebuild cost on my policy?

It increases it, usually by more than people expect, because an annexe carries its own kitchen, bathroom, services and finishes rather than being plain floor area. The buildings sum insured is a reinstatement figure — what it would cost to rebuild — not a market value, and if it is understated an insurer may settle a claim proportionately, reducing payment on any claim rather than only on annexe damage. A professional reinstatement cost assessment after the annexe is finished is the most reliable way to set the figure.

Whose contents insurance covers my relative’s belongings in the annexe?

It depends on the wording, so it is worth asking directly. Contents policies typically cover property belonging to you and members of your household, and whether a parent living in a self-contained annexe counts as part of that household is not always obvious. Some insurers will include their possessions once the annexe is declared; others expect the occupant to hold their own contents policy for the annexe. Leaving the question unanswered is the risk — it tends to surface only after a burglary or a flood.

Does a granny annexe change my council tax?

It can. A self-contained annexe may be given its own council tax band by the Valuation Office Agency, producing a second bill alongside the main house. Since April 2014, an annexe occupied by a relative of the people in the main dwelling has generally qualified for a 50% reduction on that bill, and a full exemption under Class W applies where the occupant is a dependent relative — broadly someone aged 65 or over, severely mentally impaired, or substantially and permanently disabled. Rules are administered locally, so check with your own council.

Can I insure a modular or timber annexe?

Often yes, but frequently not through a mainstream household policy. Standard cover is priced around brick or stone walls with a tile or slate roof on permanent foundations. Timber-framed garden buildings, modular units and structures built to the mobile-home route sit outside that definition, and insurers either decline them or refer them. This is specialist or non-standard construction territory — see our guide to non-standard construction home insurance for how those policies work.

What if the annexe is empty for a long period?

Unoccupancy conditions can apply to an annexe just as they do to a whole house. Many policies restrict cover once part of the property has been unoccupied beyond a set number of consecutive days, commonly cutting back to a limited set of perils and imposing conditions such as draining the water system in winter. If a relative moves into care or the annexe stands empty between occupants, tell the insurer; our guide on how long a home can be left unoccupied explains the mechanics.

Information only — not financial advice. Figures and positions described are indicative and for orientation, not quotes; policy terms, limits, conditions and exclusions vary by insurer and are set out in each policy’s own wording and schedule. Council tax and planning rules are administered locally and may differ where you live. My Insurance Expert is not an FCA-authorised intermediary and does not arrange or sell policies. Last updated: 2026-07-20

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