Before a house gets built or anyone starts on the building process, a construction insurance policy must be obtained to cover the many risks associated with new construction. This can include losses and damages sustained from high winds, fire or other variables that the contractor’s liability policy does not cover. Having the contract on hand for the home construction agreement is instrumental to show the insurance agency so that they know exactly what is and isn’t covered by the contractor. Many agents are going to make this a requisite prior to issuing a construction insurance policy.
There is a significant time frame associated with a builder’s insurance policy and is enforced on the timing of the speed of the home construction or for only a period of one years time. For example, if the new house is constructed in six months time, then the builders risk insurance policy is good and enforced for six months only. If the one year time frame is approaching, the insurance agent can issue a new policy for the remainder of the construction phase.
It is imperative to understand that the construction insurance will only cover the damages to the extent of the money that has already been spent during the construction. It will not cover the intended value of the home structure once it is built. Most policies also do not cover any damage that is incurred by the homeowner since they are not professionals and should not be on the property until building completion.
Visit The Rubin Group Insurance for more information.