New Home Construction Insurance Guide
Are You Considering Building a New Home?
Make sure that one of the first items on your checklist is to ensure that you are properly insuring your property. Do not assume that your builder’s insurance will protect you because it won’t. You need your own policy for liability and builder’s risk while the home is being constructed.
Here are some of the important facts about a builder’s risk policy to keep in mind:
Builder’s Risk Insurance
Builder’s Risk Insurance is specifically designed to cover homes while they are under construction. It typically covers the structure and materials of the home being built for theft and vandalism. It also covers materials being held offsite that will be used to build your home. Builders Risk Insurance doesn’t provide liability coverage or any protection for the home’s contents since there typically won’t be any personal possessions at the construction site.
Do you need it? Yes, you will need a policy if you own the property. In most cases, you won’t need a policy if you don’t own your property yet or your contractor purchases the builder’s risk on your behalf.
Be sure to ask your contractor for a certificate of insurance before entering into a contract with them. It is important to review the contractor’s limits of insurance with your current agent. The coverage to look for are general liability, products and completed operations (it could protect you if something happens to your home years after it is built) and workers comp coverage. If your current agent isn’t familiar with commercial insurance, contact us to review the certificate.
Length of Coverage
Builder’s Risk Policies for new construction are generally written for 12 months. However, most can be renewed if there are construction setbacks. It is very important to have open communication with your insurance agent if there will be delays and it will take longer than what originally planned for.
Do I Need a Homeowner’s Policy Too?
Not always, if this is new construction, you will need a builder’s risk policy and then some sort of liability policy.
Liability coverage is critical for a construction site because of the risk that someone working on the site or a child or a visitor to the site could be injured.
You can purchase this liability in different fashions. If you own another home or rent, you can extend liability from your primary location. If you don’t, you can purchase a stand along liability policy for the construction location.
You should take responsibility to inspect the site and make sure your builder is adequately protecting the site, but you also need to buy insurance to protect your assets in case you are sued.
Builder’s Risk Insurance Facts
1) Course of Construction Insurance is another name for Builder’s Risk Insurance. As the name implies, it covers the project and assets during the course of construction.
2) Most homeowner’s policies do not cover a home or building under construction.
3) Builder’s Risk Policies cover supplies and materials.
4) Your policy includes damage due to theft or vandals.
5) Coverage includes the project from start to finish. This includes demolition expenses.
6) Temporary structures including construction trailers, scaffolding are some of the items covered.
7) When construction is completed, you need a home owner’s policy.
New Home Construction Insurance – Frequently Asked Questions
– Do You Need New Home Construction Insurance? Yes, home owner’s policies do not cover construction, materials and supplies.
– Does a Builders Risk Policy cover General Liability? NO, lawsuits by those injured during construction are covered by liability insurance. It is best to discuss the details of a policy with a Daigle & Travers professional insurance agent.
– Who Purchases Builders Risk Policies? The property owner, contractor or both can purchase Builders Risk Insurance.
– How to Determine the Amount of Coverage? When determining the cost of new home construction insurance, there are numerous factors to take into consideration. Contact Daigle & Travers to discuss your project and the appropriate coverage needed.
We hope you found the information here to be helpful as a guide to New Home Construction Insurance and Builders Risk Policies. Contact us to discuss your project and checklist of all items needed to assess the coverage and cost.
Daigle & Travers is an insurance agency with 3 locations in Fairfield County.
- Darien 22 Thorndale Circle
- Westport 56 Church Lane
- Wilton 35 Old Ridgefield Road