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HomeBuilder’s Risk Insurance

Builder’s Risk Insurance

Builder’s Risk Insurance- Protect your investment the right way!

Ground up Construction to Renovation Projects, we have a builder’s risk insurance policy to meet your needs

Home Under Construction | Builder's Risk Insurance | Huff Insurance | Pasadena MarylandIf you are building a home from the ground up or adding a story or gutting an existing building you need a builder’s risk insurance policy.

Imagine you are having your dream home built and the weekend before the walls were to be closed, someone came in and ripped out of the electrical work in the building, to get the copper.   Well, that happened to me.   This theft costed over $13000 in new wiring as well as the work to have it re-installed.   Thankfully, we had a builder’s risk policy to cover the damage.

Whether you are the homeowner, or contractor, the policy can be written to protect your interest.  The named insured has some contractual rights under the policy, but the terms and the conditions are normally the same.

New construction is when the building is built from the ground up.  Where there was no previous existing structure before the project work began.

If there is an existing structure that will be modified, for example adding an new addition or a 2nd floor, that is considered a remodeling project.  If the structure was demolished but the foundations remains, that can be considered remodeling in most cases.

For new home construction, a builder’s risk insurance policy is generally a more cost-effective approach rather than a homeowner’s insurance policy. This is because the insured is not paying to cover contents, just the structure being built.  There are some coverages available in a builder’s risk that are not on a homeowner such as debris removal, pollution clean-up, property in transit or property stored offsite at a temporary location.

Not all builder’s risk insurance policies are the same.

Some are written on a property form and others are on an inland marine form.  The inland marine form usually provides broader coverage, but liability would have to be written separately.

When you are considering a builder’s risk policy, they can be written for both residential and commercial buildings as well as for construction of Cell towers, or playground equipment.  Remodeling projects can be from the simple cosmetic renovations to merely updating the systems and taking out non load bearing walls, to removing load baring walls and adding additions.    Depending on the scope of the work it will affect the pricing.

Are you a contractor that builds several houses per year?

For builders that do a lot of new construction projects, they can obtain a reporting form builders risk. So, rather than having to obtain a separate policy for each project they just report their new starts and change orders on the homes at the beginning of each month.

The five things that effect the cost of your builder’s risk is location, construction type, project type, optional coverages and fees and taxes.   When you are considering a builder’s risk, the key questions are when should coverage be secured? How is the policy limit determined? Can the policy limit be changed? Can soft cost such as additional permits, interest on construction loans, insurance premium, architect fees be included?

Do you have a new construction or remodeling project coming up?  If so reach out to us for some options for builder’s risk insurance.

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