Why Should Homeowners Invest in Builders Risk Coverage?
For homeowners who want to build a new home or remodel their current home, sometimes the homeowners’ policy will not cover all their risk. This is why it’s beneficial to have builders risk insurance.
Coverage for the Gaps in a Homeowners’ Policy
The builders risk insurance for homeowners covers more than the standard homeowners’ policy. Builders insurance protects property, building materials and equipment related to the construction. It may cover damages resulting from:
If damage to equipment or property occurs during construction, the homeowner may be liable.
Less Risk to the Homeowners’ Policy
Homeowners will not need the builders risk insurance forever. Generally, the standard policy term is about 12 months for a new construction project. If the homeowner is remodeling or renovating, then terms of six, nine or 12 are generally available.
The homeowner will continue to need homeowners’ insurance, following the build. If a claim is filed against the homeowner under the builders policy, then he or she doesn’t have to worry about his or her premiums or future homeowners’ insurance coverage being affected. Since it’s a different policy, premiums will not rise.
Whenever a homeowner wants to build a new home or hire a construction team for a build, it is critical to have proper insurance coverage. The financial burden from claims when a homeowner does not have insurance can be devastating.