Insurance During Construction
You’ve planned and saved for years. Now, finally, you’re building your dream home. Don’t let your masterpiece fall prey to damage or theft. Building a new home is risky. You have an open, unsecured area where things could easily go missing. You’ve got construction crews installing new heating and plumbing systems—along with the risk that those systems will be faulty. Consider purchasing insurance to cover your new home while it’s under construction.
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There are two ways to protect your home-in-progress. One option is to purchase a standard homeowners policy for the new site. This policy will cover damage to your home as it’s being constructed, and may also cover you if some of the building supplies are stolen (though the contractor’s insurance should also kick in here).
Most importantly, it provides liability coverage. Remember that clumsy neighbor, the one who injured himself at your pig roast last year? When the same guy trips over a floorboard on a tour of your building site, you’ll be protected once again. The limitation of this type of policy is that it won’t cover any of your personal property at the building until the building is made “lockable.”
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Your second option is to buy a “dwelling and fire” policy. This type of insurance provides coverage for the physical structure of your home, but doesn’t provide any theft coverage. You might want to consider this type of coverage if you’re continuing to live in your old home while the new one is under construction, as the home insurance policy on your old home will cover theft from the new home’s construction site. A dwelling and fire policy will also provide liability insurance on the site.
Once your new home is ready, take another look at your home insurance coverage. If you had a dwelling and fire policy during construction, now you’ll need to purchase a full homeowners insurance policy. Adjust your policies accordingly. And hey, enjoy your dream house!
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