insurance while building a house

Introduction

insurance while building a house a new house congratulations or you’re building a new house let’s dive into the building a new house if you guys haven’t already watched i’ll put in the description below there is a video that i made about buying a new house versus building and if you’re just buying a house great to watch this one especially if there’s still some construction going on but if you’re looking for the best deals and rates and all of that for getting a brand new home watch that video below that’s probably going to give you a lot more value than this one so hopefully youtube didn’t just crush me for sending people away but hit the thumbs up before you go that is gonna help me the most it’s all about retention and people watching our videos let’s dive right in

Construction and Homeowners Policies

insurance while building a house let’s get into the new construction there’s a few things that you have to know new construction has nothing to do with homeowners policies that are your ho3 and your ho5 policies we’re not going to dive into the actual meanings of those but let’s just call an ho3 the most common it’s your standard apparel policy where most homeowners i would say 98 of the homeowners have that type of policy it doesn’t cover new build and you’ve got to be very careful there because there’s a couple restrictions that new build does and there’s not a lot of companies that cover new build period

Choosing the Right Coverage for a New Build

insurance while building a houseso what do you really need to have for coverage for a new build you need to know a few things before you go forward one who’s the builder it usually has to be a credited and a licensed builder it can’t be the person that owns the property you’re almost never going to find somebody that will insure you if you own and you build unless you’re the owner of the company that is paying the amount for the build and you’re hiring contracted people where you’re the owner is not doing the work those are two completely different pieces i know because i fought a whole bunch of underwriters trying to find the best fit for a customer and at the end of the process ended up having to wait until they were done building it to give them a right policy which was the

Why You Shouldn’t Rely on the Builder’s Insurance

the other part that you have to be a little bit careful of is don’t trust the builders insurance they don’t care about your stuff as the company the builder might but the insurance company is not there to protect you they’re there to protect the builder and the builder may have a million dollar liability insurance and that’s great if he slips off the ladder that’s all fine and dandy but what if he has and most commonly will have a friend with him who’s not hired as an employee and that guy slips off the ladder and the builder either runs out of money or says well tough i’m sorry and it falls on you so there’s a lot of situations that that can happen

What a Builder’s Policy Covers

the other parts that you got to remember is that they’re not covering a lot of the portions of the house sure they’re covering their materials what if they’re still at the store in transit to you and they get an accident or something is broken when you get there and the store refuses to replace it that’s where your builder’s policy is going to really kick in for you is you’re going to be able to insure yourself separately from them doing whatever type of insurance they’re going to carry it’s not much different than if you look at your auto policy you have something called uninsured and underinsured motorist coverage it’s very similar to buying a builder’s policy because you’re protecting yourself in case the person you know nothing about doesn’t have the right coverage and doesn’t have enough insurance so it’s not very expensive to get but it’s very important to have

Coverage Details of a Builder’s Policy

so some of the things that your builders policy is going to cover is going to be actual damage to the physical building the structure or the dwelling you’re also going to have a lot of the building materials covered so if something happens that is not negligent on the builder’s end or if it is then they’re going to have to go after them on-site and off-site equipment so anything that you’re renting or using to build the home is going to be an additional coverage liability that’s one of the most important pieces make sure you have a lot of it if not get an umbrella that goes on top of it it’s cheap to buy and it’s good to have is going to cover you there personal property so as it’s being built if you’re like me you’re going to get excited and want to move all your stuff in or start moving things around and if you don’t have a renter’s policy that covers all of that stuff in the background your tv your couch your shoes your wallets all of your collectibles and everything like that you’ve got to be careful there as well because there’s portions when it’s in storage that don’t cover your items correctly could be only 10 that’s a common thing so that’s going to cover a lot of that transition from one location to the next additional living expenses so if something does happen to the location and you were going to move in now you’re stuck now you have to foot the bill again for another five months or six months or however long it takes to fix those problems with the home also medical payments that’s an additional coverage that you want to have in case somebody does get injured not necessarily a contractor you’re gonna show your friends the house or you’re gonna visit and they slip on the mud or something happens and they get injured usually you’re gonna have a thousand to five thousand some people more that will cover those situations either route you go it’s not gonna be very expensive to do we’re probably talking about a hundred dollars a month to have a builder’s policy some are cheaper some are more depending on the building they are going to want to know who your contractor is they likely will want some copies of some materials or they want to at least have some proof of what’s happening because they’re not just going to insure just willy-nilly out of the blue

Policy Terms and Payment Considerations

the other portion that you have to be a little bit weary of is not all companies let you just buy a month-to-month policy so there are some companies where you’re gonna find it might be tough to even get a builders policy because not all companies in most companies don’t offer that it’s just not a common thing for them and so they typically kind of bow out and say let us know when you’re done with the house then we’ll ensure it we’re happy there but in the meantime we just don’t have a product for you and in those situations you’re going to find that some of the companies that you go through make you pay the entire year up front and are non-refundable so if you know that it’s going to be a year-long policy just keep that in mind you’re great nothing’s worried there but if it’s only going to be a three or four or five month process where you’re almost done or you’re getting close to it and you really just need that insurance you may want to stay away from those companies that don’t offer refunds for those situations they do that because they know that you’re not going to stay with them and that risk level for the length of you being with them is way out of the spectrum and they know that they’re not going to convert you into a normal customer so at the end of the process there’s kind of a fee or a charge to that they’re just going to charge you a 12-month policy which is non-refundable

Next Steps and Claims Process

now you’re probably thinking what’s the next step where do i go from here once the house is getting close to being built or what happens if i have an issue well if you have an issue the claims process is very similar i will link a video up here that you can watch to go through the claims process and dealing with adjusters if you’re moving into the home and you’re just getting ready to go i’m also going to link that video here that we talked about in the beginning that talks about the new construction new build there’s a lot of discounts that you guys can apply for to get on that new build home