How To Buy Insurance for a Home under Construction

Few things are as exciting as building a new home, but failing to insure the construction site properly could cause both financial trouble and an undue amount of stress and hardship.  Many individuals mistakenly believe that they are not required to purchase insurance until the house is complete and an occupancy certificate is issued.  While there may not be any personal belongings on the property to protect, there still is the potential for liability issues and other losses.  Buying insurance for a home under construction is not difficult, but a person needs to investigate several things before shopping around for a policy.

First and foremost, a future homeowner needs to gather some important information from their builder.  Many construction companies carry their own insurance policies that will cover their employees in the event of any type of accident or injury, but it is necessary to inquire as to whether their insurance will cover subcontractors and other individuals on the job site.  If the builder carries adequate insurance to protect against liability issues, the future homeowner will be able to purchase a policy with lower coverage levels.  The builder should also provide copies of all necessary business licenses, permits, and workers' compensation coverage.  It is also important to ask the construction company if they carry insurance that will replace materials in the event of any type of loss or theft.

After an individual has collected all the necessary information, they then need to contact their lender if they are doing a construction loan.  Lenders may have very specific requirements and it is imperative that a future homeowner complies with the guidelines set forth.

The next step in buying insurance for a home under construction is to contact several different insurance agents and request quotes.  The agent can be very helpful in determining what type of coverage levels will be required and what amounts will be optimal.  However, an insurance quote will only be accurate if all of the above information is given to the company.

Buying insurance for a home that is in the construction process typically escapes people's minds, but it should be considered one of the most critical components of the entire project.  Taking the time to retain appropriate coverage could save an incredible amount of money and even provide peace of mind.  If a curious neighbor becomes injured on the property or if a large quantity of materials get stolen, a wise consumer knows that their insurance company will help them through the ordeal.


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