WEDNESDAY, JUNE 27, 2012
Building your dream home can be an exciting opportunity for new home builders. Between choosing carpet and pouring over paint samples, new home builders have an additional burden of being properly insured. While contractors generally carry a required limit of insurance for their company, it is important for homeowners to carry adequate coverage. For homeowners who choose to build rather than buy, the burden of being insured is much higher. This article will provide an overview of a few basic principles for all new home builders.
 Homeowners v. Builder’s Insurance: Many homeowners believe that their homeowners insurance policy will cover their home, regardless of the status of that home. The truth is homeowners insurance alone is not insufficient for the construction of a new house. Generally, homeowners insurance will cover the building once it is lockable, but until then, homeowners policies do not provide coverage. Builder's risk insurance protects materials, equipment and certain equipment used in the construction process against fire, wind, lightning or vandalism.
Contractor’s Liability: Even for home builders who choose a reputable contractor or even a family friend to build their home, it’s important to look after your own interests when it comes to insurance. Acquiring liability insurance protects homeowners from the risks associated with contractor responsibility. Liability insurance is usually part of basic homeowners insurance, so it is important for new home builders to review their policy to be sure this liability coverage includes contractor’s liability.
Dwelling and Fire Coverage: This type of policy is often a good idea if you’re living in your current home while you build a new home. This coverage is limited, but may be enough to cover you in the in-between phase while your new home is not yet “lockable,” and therefore not covered by homeowners.
Location, Location, Location: When choosing the location of your new house, remember that location might affect the cost of your homeowners insurance over time. Some of the factors to keep in mind are the closest fire department, weather trends, high-risk areas for earthquakes, floods, hurricanes or tornadoes, etc.
Design Safety: While most homeowners focus on tile and trims, it’s important to design your home with safety and security in mind. Incorporating some safety and security features may cost extra upfront, but will increase the resale value and reduce the cost of your homeowners insurance.
Insurance gives you peace of mind, protection and assurance that if anything should happen to your new dream home, you will be covered adequately. Choosing coverage should be discussed with your agent to be sure that you’re covered for a wide range of circumstances. For example, if a new neighbor decides to take a tour through your construction site and is injured, liability coverage will cover you. If your tools or equipment are stolen, building insurance will cover it. (Contractors should cover their equipment with their own policy). Before you begin digging, you should review adequate home coverage for your new home during construction. To avoid exposing yourself to a great deal of risk that could potentially destroys your partially-completed home.
By Matt Reynolds - Google+
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