Coverage Begins Early: Home Building Insurance
Here's the scenario: you get off work, call your spouse, and head to the site of your new dream home. As you pull into the lot, you can tell something is wrong: the partially built house has been vandalized. And just like that, a dream turns into a nightmare. Home building insurance is essential to protect your home of the future. Criminals strike quickly when there are no doors and no one at home. But the effects of adverse weather might be even worse for a home with an incomplete structure. Or from a fire, with no one around and no smoke alarms. Fortunately, an online search of home building insurance providers allows you to easily find affordable coverage.
The Beginning Point
Unless you're one of the fortunate individuals who pays for his home up front, you'll have to buy a home building insurance policy. Virtually every mortgage lender will require it. So, at the outset you need to buy a policy protecting the dwelling and its contents, and also a liability policy. It's also very important to review the contractor's insurance so you know that person is covered for his work. A contractor or builder is not always legally required to have coverage to build, so you should always ask. Then you'll be protected from accidents that occur involving the contractor's work or materials.
If you already own the land, then you will be responsible for accidents that occur on-site. If a kid gets injured playing on the site, you need liability insurance to make sure you don't suffer a costly lawsuit. Imagine having to pay for medical expenses, pain and suffering, and other claims that could cost thousands or millions of dollars. Your home project would likely have to be abandoned altogether. Liability coverage is a major part of home building insurance.
Your contract will include wording about who owns the materials used to build the house. The contractor will of course own his own equipment, but you need to know if you're responsible for things like the wood used to build cabinets. It's likely you'll be responsible for these things before completion, which means you need a builder's risk insurance policy to protect you against theft. If a set of shelves sits in the foyer prior to installation, and someone steals them, a homeowner's policy will not replace them.
Comprehensive Home Building Insurance
A good option to investigate is a course of construction policy. This does not include liability coverage, but can cover most risks, including builder's risk, fire, vandalism, and replacement cost. If you shop around for this kind of policy, you can probably find comprehensive coverage for a reasonable price. Make sure you review the coverage so you're not surprised later, after your future home has suffered something disastrous. Also keep in mind that market value doesn't come into play here. Insurers make their own assessments about replacement value. Since these assessments inform their premiums, it's wise to compare as many insurers as you can. A free service like NetQuote.com can do this for you. You can compare offers quickly and see which coverage works for you. Home building is often a long and expensive process, but home building insurance doesn't have to be.