How to Get Residential Builder's Risk Insurance

Residential builder's risk insurance can mean two different things. You can purchase builder's risk insurance as a homeowner, to cover renovations you are doing to your current home. Some banks require you to have proof of builder's risk insurance before approving a home improvement loan. A builder or contractor can also get residential builder's risk insurance to protect new homes that are being constructed in a residential area.

Things You'll Need

• Projected market value for end result
• Location in relation to closet water source
• Measurement of your house in square feet
• Application
• Dates for renovations
• Business license numbers

Instructions

Get Builder's Risk Insurance to Cover Renovations in Your Home

1. Plan your start and end dates for remodeling your home. The builder's risk insurance will only cover the time you are renovating, so this is important information for your policy.

2. Know the square footage of your house. This figure is almost always on the paperwork you get when you close on your mortgage.

3. Find out how far your home is from the nearest source of water. This can be a lake, stream, pond or a fire station. Your homeowner's insurance policy may have this detail listed on it if you do not know offhand.

4. Estimate the dollar amount at which the completed renovation will value. If you are having a builder perform the work, he may be able to give you a figure. A home appraiser may also be able to assist you with this detail.

5. Apply for the builder's risk insurance plan you have chosen. Name yourself as the insured if you are doing the work yourself. If a construction professional is doing the remodeling for you, she should be named the main insured.

6. Pay the insurance premium in full and on time to ensure that you are fully covered for your project.

Get Builder's Risk Insurance When Building New Homes

1. Fill out an application to insure new homes you are building in a residential area. As a contractor or homebuilder, list any business license numbers that show you can legally build in your state. Give a synopsis of your work experience, including any builder's risk claims you have filed in recent years.

2. Confirm that you have coverage in case building materials are damaged or lost while in transit to the work site.

3. Include any profit that you expect from the construction of a new residential home in the value of the unit. This means the price from the sale of the house once it is completed.

4. Pay your premiums on time. Notify the insurance company when construction is completed in order to dissolve the policy.

Tips & Warnings

• If you have people working on either a new or existing home, consider getting liability insurance as well as builder's risk. This protects you if someone injures himself on your property.