So, you’re in the exciting process of building your dream house from the ground up. From choosing the perfect floor plan to selecting the right contractor and even deciding on the finest details like cladding and kitchen hardware, the decisions seem endless. But amidst all the excitement, it’s crucial to consider one vital aspect: your homeowners insurance. Now, you might be wondering if you need home insurance while your house is still under construction. And the answer is a resounding YES!
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Just because your house isn’t fully built yet doesn’t mean you can skimp on insurance. After all, you have a significant amount of money invested in this property, and with great investments come great risks. While your home is being built, you still need insurance coverage, but it’s not the same as the typical coverage you’d get for a finished home. Traditional homeowners insurance includes additional coverage for personal property theft, which may not be necessary during the construction phase.
What you need is builder’s risk insurance coverage. This type of insurance provides coverage if anything happens to the structure or other parts of your home during the construction process. It’s worth noting that some insurance companies offer builder’s risk as a separate policy, while others include it as an endorsement to a homeowners policy. At Alfa Insurance, we offer builder’s risk as a backing to the homeowners policy, making it easier for you to transition to the appropriate coverage once construction is complete. To gain a better understanding of your policy needs, don’t hesitate to reach out to your agent.
What Exactly Is Builders Risk Insurance?
Builders risk insurance comes in various types, but their purpose remains the same: to protect buildings during the construction phase. This insurance coverage is designed to help safeguard your investment by providing compensation for losses and damages that may occur on the construction site.
When Should You Obtain Builders Risk Insurance?
Now, you might be wondering when is the ideal time to secure builders risk insurance. Well, the answer is simple: before construction even begins. It’s always best to have a policy in place right from the start. Contrary to popular belief, insurance isn’t only necessary when you start living in the house. The last thing you want to worry about while building your new home is what would happen if a mishap occurred during the construction process.
Who Is Responsible for Securing Builders Risk Insurance?
Here’s a crucial point to remember: don’t assume that your builder will have all the necessary insurance to protect your property. As the owner, it’s your responsibility to obtain coverage for your property throughout the construction phase. This coverage ensures that the structure is protected in case repairs or replacements are needed due to covered perils. It’s important to note that your contractor’s insurance typically doesn’t cover natural disasters like hurricanes, tornadoes, or fires. To determine the best coverage for your needs, consult with your agent.
What’s Included in a Builders Risk Policy?
Now, the specifics of each insurance company’s policy may vary, so it’s essential to find a policy that aligns with your needs. While builders risk policies often cover construction-related aspects, it’s crucial to also secure liability coverage. Liability coverage is vital to protect yourself from potential lawsuits and unexpected incidents. For example, if your mother-in-law visits the construction site and accidentally trips and breaks her arm, you would be held responsible. Additionally, liability coverage can help cover medical bills and other costs in case a neighbor’s child sustains an injury on your property during construction.
At Alfa Insurance, our Alpha Builders Risk Endorsement provides limited coverage for theft of materials or supplies owned by someone other than the insured. We also offer a builders burglary risk endorsement that includes burglary coverage for a home under construction, provided that the home is at a stage where it’s completely closed and can be locked.
Once the build is complete, you can seamlessly transition from the builders risk policy to a regular homeowners policy, securing coverage for your home and all its finished belongings. Remember, our Alfa agents are here to assist you every step of the way. So, give us a call today and request a free quote. Let’s ensure your dream home is protected throughout its construction and beyond.