A recent housing aspirations report from Zillow revealed that 76% of homeowners would rather renovate than move into a new home. Throughout most of the country, the cost of buying a house is rising, so adding on a room or remodeling to boost the value of your current home is often a sensible option. Other prospective homeowners prefer new construction to purchasing an existing home. In the case of renovations or new construction, builders risk insurance is an important consideration.
Learn more about builders risk insurance below, and contact King Street Agency today to request a quote.
What Is Builders Risk Insurance?
Offering protection for buildings under construction, a builders risk policy is a unique type of property insurance. The policy provides coverage from the effective date to when the work is completed. This is especially important for individuals who are constructing a new home or who are renovating or adding on to their existing home. The policy provides coverage for your home while it is under construction in addition to the materials, supplies and equipment involved.
Why Might I Need Builders Risk Insurance?
If you decide to build a new home or make structural changes to your existing home, it won’t be an overnight process. There may be framework, equipment, and building materials left on-site for days or weeks at a time. If you’ve paid contractors thousands of dollars to make a renovation but an accident happens, builders risk insurance may be the only thing between you and the financial burden of costly repairs.
An Example: When Remodeling Doesn’t Go as Planned
Say you’ve found a contractor who will renovate your bathroom, with plans to tear down a wall and increase the room’s size. The contractor has excellent credentials and seems to know what they’re doing, stating that the job should take two to three weeks to complete. On day three, the contractor takes up the tile and accidentally hits a fresh water pipe. As a geyser sprays water throughout the bathroom, the contractor searches for the pipe to shut off water to the leak. By that time, thousands of dollars in damage may have been done to the new structure, materials, and equipment used in the building process. Your builders risk policy will cover this. Your typical homeowners policy will not.
The Difference Between Homeowners & Builders Risk Insurance
It’s important to note that homeowners insurance covers the property you currently own, but it has nothing to do with the area where a new structure is being built. If your new addition is 90% complete but then collapses, costing $20,000 to replace—only builders risk insurance would cover the damages.
To put it simply, builders risk insurance covers the structure, materials, and equipment involved with new construction on your home. Only homeowners who are planning to construct a new home, renovate, remodel, or add a new enhancement to their home will have a need for builders risk coverage. Making major changes to your home can be a stressful time, but this type of coverage can help to take the worrying out of the experience.
Important Tips For Builders Risk Insurance
These tips should help you decide whether builders risk coverage is right for you:
- Many aspects of this coverage are customizable, including what’s covered and for how long.
- Builders risk insurance typically ends when the construction job is complete.
- Consider the ultimate increase in your property value and peace of mind in your decision.
- What materials are involved in your new project? What’s the most you’d have to pay in an accident?
Speak with an experienced agent to learn more about this policy and if it’s right for your unique needs.
Request A Quote
Like most things, construction doesn’t always go as planned. Accidents do happen, and they can be expensive. If you’re building a new home, adding a room or other structure onto your home, or remodeling, consider mitigating the risk with builders risk insurance coverage from King Street Agency.
Contact us today to request a quote.