Did you know that there is insurance for your home while under construction? Not only do you need to protect your dream home once it’s built, but you have to protect it while it’s being built. The insurance you need is called builder’s risk insurance.
I already have home insurance and the contractor has insurance. Why do I need more insurance?
While you should always use a licenced contractor and have them provide proof of liability insurance, you need to protect your project while it is under construction. Buildings are subject to many different risks while under construction – for example: it might catch fire or high winds may blow walls down or damage the roof, even rip it off entirely! I think your new rec room is going to need a roof… don’t you?
That’s a good point. What does builder’s risk insurance cover me for?
A builder’s risk policy covers many things, such as fire, wind, theft and vandalism, and more. Typically it would not cover damage due to earthquake or flood – coverage for these can be purchase separately. If you live by the beach, wind damage may be excluded unless specifically endorsed .A builder’s risk policy does not cover accidents and injuries at the worksite – that’s why you need licenced and insured contractors.
What about the cottage we were thinking of building?
Excellent question! A builder’s risk policy is not only for an addition to your home, but for an entirely brand new project as well. The policy would expire when construction is complete and you would need to be sure to take out proper insurance on the property afterwards.
Can’t the contractor do this?
While it is entirely possible for the contractor or architect to take out a builder’s risk policy, it is beneficial if the property owner – in this case, you – do it yourself. That way, in the event of a claim and the resulting payout; you have control of the funds and not the builder.
The best way to get things going is to give Absolute Insurance Brokers a call at 1-877-941-2266 and talk to us about your project. We will make sure you get the coverage you need and keep the process simple, so you can worry about how to decorate the new rec room and not about insurance.