Builder’s Risk Insurance vs Homeowners Insurance

Builder’s Risk insurance for homeowners will give you protection for as little as 1% of the construction costs.  A tiny price to pay for a huge amount of protection. You may have home insurance that you’re happy with, but is it enough for the risks that go with construction? Separate coverage is always worth considering.

Here, we’ll look at 4 situations where Builder’s Risk insurance for homeowners beats out a typical private policy.

1. New Builds

This one may seem obvious. But sometimes new owners don’t realize Homeowners Insurance only covers finished buildings.  If your project has no lockable doors or windows, Builder’s Risk is the best way for everyone to protect their materials and temporary structures.

2. Renovations

OK – it doesn’t cover new builds. But how about new work on an owned property?  The fact is, the risks of any unoccupied building differ from those of a completed property. Builder’s Risk is designed around these hazards.  For instance: while your roofer applies new shingles, the frame is exposed to the elements. Storms that don’t normally pose a threat could inflict huge damage.  Similarly, an unlit construction zone looks far more tempting to thieves and vandals than an occupied home.

Water damage has risen to 10% of claims filed, with more extreme weather patterns. It is especially dangerous for exposed lumber and other construction materials.

Builder’s Risk insurance for homeowners protects against these and other non-liable damages, including wind, fire, lightning and blackouts. The losses these cause during construction are often beyond the scope of home insurance.

3. Saving Money

For owners overseeing low-cost jobs, home insurance and the contractor’s coverage may seem like enough. Builder’s Risk can sound like unnecessary hassle. However, it could mean a 25-30% reduction in insurance costs, depending on circumstances. This is because it’s a temporary policy that covers only the structure and materials during the job.

Well-defined Builder’s Risk for homeowners means not paying to cover things like electronics, clothing or even inhabitants that may be absent.

Your own Builder’s Risk policy protects against negligent work, too – letting you easily recoup losses caused by the contractor.

4. There Are Project-Specific Risks

Unlike Homeowners insurance, Builder’s Risk is highly customizable.  First, you set the period, usually 6, 12, or 18 months. Typical home insurance has strict limits on renovation time – if any is allowed.  Secondly, Builder’s Risk can cheaply include extensions based on your particular exposures.

If your property is in California or Ohio, you could add an extension for losses caused by earthquakes. If you’re environmentally focused, there are add-ons to maintain clean air and replace or repair renewable energy sources damaged during construction.

Some perils are more likely than others. Home insurance just can’t be tailored as easily as Builder’s Risk. It covers a much wider range of eventualities, giving you less to worry about.

Builder’s Risk Insurance For Homeowners Just Makes Sense

Builder’s Risk insurance for homeowners is a safer option than relying on your personal policy. You can be sure to get the best and cheapest coverage by speaking to our professionals. We can help you design a policy that includes all of the factors relevant to you. Give Builder’s Risk a call at 887 960 0221.