Oct. 1, 2021
Finding the right insurance when building a structure from the ground up, or even just doing minor remodeling, can mean the difference of maintaining financial stability or falling into financial ruin. Many people are not familiar with what to look for in this type of policy. This leads them to feeling overwhelmed and deciding to forego coverage which can be a devastating mistake. This is something that does not only happens to first time builders or home owners, it is also something that seasoned contractors have experienced. For this reason, it is very important to know what to look for when purchasing a Builders Risk policy.
Considering the many things that can happen to your project during the course of construction it is pertinent to know both your hard and soft costs so that your policy accurately covers them. Our agents have years of experience understanding these types of policies and can help guide you in the right direction so that you do not experience any additional financial burden. Some things to consider when selecting your coverage are:
Most policies finish coverage when the project has come to completion, however, some insurance companies vary on what they consider completed. For example, if there is a fire after the building has been completed but there has not been a certificate of occupancy issued one could argue that technically it is not completed as there has not been an official walk through and could have been denied, thus rendering the building incomplete. If there was a prior agreement made on what percentage makes the project complete this can affect an insurance claim. If the property has been occupied partially or fully while under construction this can void certain terms. This has always been a source of contention between policy holders and insurance companies. You must understand the terms clearly so that if something should happen, you do not find yourself in the middle of an empty lot with even emptier pockets because your coverage ended without having the next policy in place.
All in all, you must begin your project knowing the many parts of what makes up your structure and thoroughly understanding the type of policy you may need. This will save you money and headaches should anything go south. Small investment on this short term policy is worth the small price you pay in comparison to the larger loss you will incur without it.