Builders Risk Insurance - Is It For Contractors Or Homeowners?
Builders Risk Insurance is basically a form of property insurance, as it covers the property while it is being constructed. Property owners may take out a Builders Risk Insurance policy, but more often it’s a policy the contractors must take out. Most home builders offer a turnkey build, where they buy the land and build the house before selling the house to a prospective home buyer, but there is no closing until the house is completely built. However, a homeowner who owns land can take out a construction loan themselves. In this event, the builder may negotiate to have the buyer insure the building while being constructed.
When you build your dream home, you should be able to focus on having a safe and enjoyable experience rather than thinking about how much it is going to cost to fix the building if something happens. If you have the right insurance coverage, you will not have to worry about having to spend more money replacing items or repair the building.
Builders Risk Insurance can also be purchased by builders who are constructing an addition onto an existing building, or constructing a new building on a site that has already been developed. Areas of coverage for typical property insurance risks include, damage caused by most weather events and fire. Some policies can also cover the people working on new homes and buildings when they are being built. Normally, the policy will also cover theft and vandalism damages as well. To ensure you have adequate coverage, policies may be set to a fixed percentage of the total cost to construct the property. A key point to check is to determine how long the policy goes for because it may or may not not allow for extensions in the construction timeline.
Builder's Risk Insurance policies can vary greatly in the amount that a carrier will pay out if an incident occurs. So it is important to compare a number of different companies before settling on one that you feel comfortable with. This is why you need a local insurance agent who specializes in this type of construction insurance who will have access to a number of insurers who offer a variety of policies. That way, you will be able to compare their price points and features side-by-side.
If you decide to purchase Builders Risk Insurance, it is advisable that you choose a reputable company that has experience in insuring homes or buildings. You should also consider the ease of which you could make a claim later on, as well as the level of customer service you will receive from the insurer once you have made a claim. This type of information can generally only be determined by dealing with an experienced local insurance agency.
What does Builders Risk Insurance cover?
It is important to know exactly what the insurance covers because you may need coverage when your house is damaged by fire, weather, subsidence or any other disaster that causes structural damage to a building. These kinds of incidents can happen at any time and without warning. This is why it is vital to have insurance during the time your new home is being constructed. As deductibles and coverage options vary depending on the insurance carrier, it is highly recommended to consult with your Pearson Wallace Insurance agent who will be knowledgeable about these types of policies and the benefits they offer.