Builders Risk | Shelter Insurance®

Don't Build Your Home Without It!


When you're building a house, things can happen that are out of your control. It could catch on fire, get blown away by a tornado, get vandalized, etc. If this happens, who pays for the loss? Unless you have insurance, you may have to pay for the entire loss.

When it comes to choosing the right policy for this stage of the game, you have more than one option. Some insurers will endorse a Homeowners policy to provide coverage while others have a builder's risk endorsement for a dwelling or fire policy. A builder's risk policy may cover physical damage to the building under construction such as damage from a fire, tornado or wind damage, hail damage, and vandalism. You may need an additional policy for stolen tools or equipment. In many cases, the builder will carry his own builder's risk policy, so you should talk with your builder to determine who is responsible for insuring the structure. If it is your responsibility, talk to a trusted agent to find out which option suits your needs best.

Your agent will probably ask questions about the type of house you're building, the location of the property, the materials that will be used. Your agent will ask the dates the policy should be in effect, what you want your deductible to be and more. If you make a claim, the amount your insurance company pays for will depend on the amount of coverage you bought, the stage of completion and of course, what the policy covers, which varies by insurance company.

Whether you get builder’s risk coverage on a dwelling or fire policy, realize that neither of these are the same thing as a homeowners policy. You need to get your builder's risk coverage before construction begins, but you may not need to get your homeowners policy until you close on the house or move in. Before you do, ask your agent if they provide a discount for new construction homes. Most will give you a discount for a certain period of time if your house is newer construction or it's brand new. That's just one more thing to enjoy about your new home!

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