How to Buy Insurance for a Home Under Construction

Building your own home? Are you struggling to buy insurance? If you wish to get insurance for a home under construction there are few options available. Choosing the right option will depend on the way you want to construct your home. Have you hired a contractor to build the house on your land? Are you building it on your own? Or are you providing material to your hired contactor for building the home? The insurance cost will vary depending on these three categories. Here are a few guidelines on how to buy insurance for a home under construction.

Instructions

Difficulty: Moderately Easy

1. Assess your needs and draft a plan to build your home. If you are going to hire a contractor, make sure you take the right insurance protection.
2. Understand who owns the property while under construction. If the builder is the owner and if you will get the possession upon completion, then you may not need to buy insurance.
3. Decide the kind of coverage you want to have. You might want to protect for liability of your assets arising due to third party injuries on the property. As the land belongs to you, you are equally responsible for events occurring at the site while your home is under construction, along with the contractor.
4. Check the credibility and financial capability of the contractor. The hired contractor should have sufficient insurance before you assign him the job.
5. Get a contractor’s policy signed with an "additional insured" clause. This will provide additional protection in events when you may be sued.
6. Learn about the Builder’s Risk Insurance policy. It has to be on either the name of the contractor or the homeowner. Under this policy, the risks coverage is for the home is under construction and not usually for theft of material.
7. Talk to an insurance agent. He or she will suggest to you the best option based on your situation. A lot depends on the construction costs, duration of work and your financial condition.
8. Collect more quotes before choosing a plan. Check the extent of coverage, especially the limitation clauses.
9. Finalize the best plan after you are sure it provides the kind of coverage you want.

Who Can Help:

• Get free home insurance quotes from multiple agents near you at NetQuote.com

Tips & Warnings

• Inform your insurance agent about changes in duration of construction, if any. Arrange to terminate the policy or convert it into a homeowner’s policy with the same company. This may help you save money.
• Add protection to your policy by including "sub-contractor’s risk" if your contractor is going to hire other agencies to finish the job. Make sure the premium payments are adjusted and collected from the principal contractor.
• Learn about Builder’s Insurance and see if it applies to you. Ensure all major risks have adequate coverage in the policy while building your home.