What The Heck Is A Builders Risk Policy?
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Congratulations! You are building a home from start to finish. Or, you have an investment property you are “flipping” with new cabinets, bathrooms, flooring and vinyl siding. Your credit score is excellent, and you have the loan lined up! But your closing is held up due to a requirement from the lender for Builders Risk Insurance. You see the term builder, and you contact your contractor to see if this is something they can handle for you. But is that a good idea?
A project as important as your new dream home, or an investment property that can help lead you to financial independence should not be left up to a general contractor to decide the appropriate coverage. Too much faith is put into that profession as it is. You need to control and quote the builders risk insurance yourself, with a qualified and experienced independent insurance agent. But what exactly is builders risk insurance?
Based on the Inland Marine policy form, this specialized policy is designed to grow in value as the construction progresses. For example, if you are building a $500,000 house on day 1 of the project, a builder delivers $50,000 of lumber, plumbing, masonry, etc. to the job site. That day, if you suffered a total loss, the policy would only pay $50,000. But on the last day, when you are putting the finishing touches on your beautiful home, you would expect your insurance to pay the full amount of $500,000 needed to rebuild. So the policy has a time element of 3 months, 6 months, one year and so on. There are different options for reporting (what is the actual value of the project on a specific date). Some policies have automatic reporting and adjustments of the valuation over time. More complex projects require actual reports from the insured. The specific coverage trigger for this builders risk is known as a “difference in condition” as opposed to naming fire, wind, lightning, explosion as specific causes of loss. As such, builders risk is a broad coverage form with comprehensive coverage.
Puharic and Associates has created a convenient quoting tool for Builders Risk that you can use to have your accurate quote emailed to you within minutes. Simply click on: https://www.puharicassociatesinc.com/builders-risk-questions. The app is convenient, fast and easy to use with either your mobile phone, tablet or other computing device. On average, it takes about three minutes to complete.
Some final thoughts on Builders risk: NO, you cannot use an online homeowners quote to cover that project. You are not saving anything. You are putting your entire financial future to risk. And YES, you need liability insurance. You cannot depend on your contractor’s policy on nights and weekends. Good luck with your project and call or email us today!
A project as important as your new dream home, or an investment property that can help lead you to financial independence should not be left up to a general contractor to decide the appropriate coverage. Too much faith is put into that profession as it is. You need to control and quote the builders risk insurance yourself, with a qualified and experienced independent insurance agent. But what exactly is builders risk insurance?
Based on the Inland Marine policy form, this specialized policy is designed to grow in value as the construction progresses. For example, if you are building a $500,000 house on day 1 of the project, a builder delivers $50,000 of lumber, plumbing, masonry, etc. to the job site. That day, if you suffered a total loss, the policy would only pay $50,000. But on the last day, when you are putting the finishing touches on your beautiful home, you would expect your insurance to pay the full amount of $500,000 needed to rebuild. So the policy has a time element of 3 months, 6 months, one year and so on. There are different options for reporting (what is the actual value of the project on a specific date). Some policies have automatic reporting and adjustments of the valuation over time. More complex projects require actual reports from the insured. The specific coverage trigger for this builders risk is known as a “difference in condition” as opposed to naming fire, wind, lightning, explosion as specific causes of loss. As such, builders risk is a broad coverage form with comprehensive coverage.
Puharic and Associates has created a convenient quoting tool for Builders Risk that you can use to have your accurate quote emailed to you within minutes. Simply click on: https://www.puharicassociatesinc.com/builders-risk-questions. The app is convenient, fast and easy to use with either your mobile phone, tablet or other computing device. On average, it takes about three minutes to complete.
Some final thoughts on Builders risk: NO, you cannot use an online homeowners quote to cover that project. You are not saving anything. You are putting your entire financial future to risk. And YES, you need liability insurance. You cannot depend on your contractor’s policy on nights and weekends. Good luck with your project and call or email us today!