What You Should Do About Home Construction And Renovation Insurance
If you're building a new house or renovating an existing one, you'll need builder’s risk insurance to protect your investment.
If you’re building a new home, you already know there’s a lot more to it than choosing the right contractor and kitchen cabinets: Obtaining sufficient insurance coverage in the construction process is important. Remember that unfinished homes are also vulnerable to bad weather and vandalism, so make sure the building, any personal property inside, and your liability exposure are all properly insured.
Builders liability insurance comes into play in this case. For buildings under construction, reconstruction, or repair, builders liability insurance protects landowners, do-it-yourself builders, and general contractors. Bear in mind that these plans do not cover damages that occur before or after construction starts, so you’ll want to make sure you have regular homeowners insurance at the time the project is finished.
Do You Still Need Builders Liability Protection If You Employ a Contractor to Build Your House?
Builders liability insurance is usually obtained by general contractors or custom builders since they have a greater understanding of the risks associated with the project and the construction materials that need coverage.
Depending on the terms of the builder’s contract, you will be responsible for buying builders risk insurance and ensuring that the project is adequately covered from start to finish. Make sure you read the builder’s contract and understand any insurance commitments you might have.
Even if your builder has builder’s risk insurance, the coverage may be minimal. Check if your employer has liability and workers’ compensation insurance, and speak to your insurance provider about any differences in coverage.
Insurance for a Renovation Project at Home
If you plan to renovate or add on to an existing building, you should first contact the insurance provider. They’ll double-check that you’re sufficiently protected during the remodeling phase.
The type of insurance you’ll need depends on the extent of the remodel and whether or not the house is occupied during construction. As an add-on to the homeowner’s insurance policy, several insurance providers provide home under construction endorsements and provide nonstandard coverage for renovation-related injuries or incidents.
If you intend to live somewhere else while the house is being renovated, keep in mind that a typical homeowners insurance policy will not cover collateral damage or injuries that occur while the house is empty. Before your temporary transfer, talk to your insurance provider about getting a vacant or unoccupied home insurance endorsement or policy.
Before you begin, make sure you’re covered.
Take the time to consider your insurance needs and ensure adequate coverage before work starts on your home building project, no matter how large or small it is. The last thing you want to discover after a building accident is that your safety net has holes in it.
And if you think a renovation is months or even years out, it’s worth it to shop around for a new homeowners policy now. Comparing your policy against others will help you identify savings, coverage gaps, and other benefits. An insurance platform like Policygenius will help you with this by learning about your situation and collecting customized quotes from top insurers on your behalf.
Builder’s risk insurance is built primarily for buildings under construction and offers extensive protection against “called perils.” They cover the building, as well as the materials and equipment used to build it. The specific perils covered by the policy can vary, but they usually include fire, fires, burglary, vandalism, wind, lightning, and hail.
A builder’s risk policy also involves common coverage exclusions that should be recognized. Employee theft, earthquakes, flood damage, voluntary termination of work, and other exclusions are common.