Building a New Home? Make Sure You Buy Construction Insurance
A home being constructed from ground up or being renovated is susceptible to damage from a number of elements. If you are having a new home built, you need coverage against losses arising during the construction process. This is where construction insurance comes in. Categorized under property insurance, this protects the homeowner’s and contractor’s interest in the equipment and material being used for the construction in the event that these items suffer damage or loss from a cause as covered in the insurance policy.
Construction insurance is bought by you, the homeowner, or the contractor hired to construct your home, if this is a mandatory requirement in the contract. In some cases, insurance proof will have to be shown to abide by local, state or county building codes. It is a smart option that can protect your investment during the home construction phase. Treat it like homeowners insurance (protects your home once it is inhabited) except that in this case, it protects the emerging structure.
What does this insurance cover? Typically, it covers losses that occur as a result of vandalism, high winds, fire and lightning. Generally, it does not provide coverage for conflicts/wars, flood, earthquake and losses arising from the homeowner’s unintentional actions. However, it is a good idea to check with your insurance provider or broker if you can be covered for water damage arising due to floods or other factors. It would also be a good idea to be protected against theft, as construction sites are targeted quite frequently by thieves.
This coverage will hold good only during the construction phase and terminate once the home is built and ready to be occupied. It is highly recommended that, as a responsible homeowner, you buy construction insurance and enjoy peace of mind knowing that your finances will be protected should misfortune strike your under-construction property.
Construction insurance is bought by you, the homeowner, or the contractor hired to construct your home, if this is a mandatory requirement in the contract. In some cases, insurance proof will have to be shown to abide by local, state or county building codes. It is a smart option that can protect your investment during the home construction phase. Treat it like homeowners insurance (protects your home once it is inhabited) except that in this case, it protects the emerging structure.
What does this insurance cover? Typically, it covers losses that occur as a result of vandalism, high winds, fire and lightning. Generally, it does not provide coverage for conflicts/wars, flood, earthquake and losses arising from the homeowner’s unintentional actions. However, it is a good idea to check with your insurance provider or broker if you can be covered for water damage arising due to floods or other factors. It would also be a good idea to be protected against theft, as construction sites are targeted quite frequently by thieves.
This coverage will hold good only during the construction phase and terminate once the home is built and ready to be occupied. It is highly recommended that, as a responsible homeowner, you buy construction insurance and enjoy peace of mind knowing that your finances will be protected should misfortune strike your under-construction property.
