Saving Money On Course Of Construction Insurance
December 7, 2008If youre shopping around to have your own home built and have discovered that going it alone is one of the most cost-effective approaches to take, youre on the right track. As an owner builder, you will be afforded opportunities throughout the construction process to save some serious cash without having to rely solely on your skills to get the job done. Taking on this role, however, does require that you assume some responsibilities along the way. Making sure course of construction insurance is in place is one of those responsibilities.
What Is Course Of Construction Insurance?
Course of construction insurance is a special policy that protects you from liability and theft during the actual building of your dream home. This type of insurance is sometimes provided by a general contractor. This may not always be the case, however. It does pay to make sure coverage is in your contract if youre dealing with a general contractor. If youre going it alone, you will have to get a policy in your name.
Who Requires Course Of Construction Insurance?
Course of construction insurance is generally required by mortgage companies that finance the construction of new homes. This protects their investment in your home-building project and it also protects yours. When you have a proper policy in place, youll be protected from such things as:
Injury claims If someone gets injured on your homebuilding site, this type of insurance will cover it. While a builders own insurance or workmans compensation will likely cover the construction personnel on site, those policies dont extend to passersby who might be injured during a mishap.
Damage If your half-built house is damaged due to fire, theft or other event, a course of construction policy should cover the costs of replacement. This is vital to protect the investment that is already in place.
Theft Jobsites are like a candy store to small-time thieves. Copper wire, tools, expensive machinery and even wood and other materials can all be targets for crafty thieves. They can arrive in the dark of the night and rob a construction site blind. When course of construction insurance is in place, the losses should be recoverable. This means the job can get back on track with relative ease even if the unthinkable happens.
Why Should I Get Course Of Construction Insurance?
Course of construction insurance will add on somewhat to your overall bottom line. This type of policy, however, can be a vital lifeline if the unthinkable does happen. The reasons to heed your mortgage companys request and purchase a policy include:
Legalities Lenders who are willing to fund construction projects are generally pretty serious about having this type of coverage in place. If you cross them, your mortgage could be voided. This would mean the mortgage company would have the right to call in your debt even before your home is finished an habitable.
Peace of mind When course of instruction insurance covers a property during construction, you can sleep at night. While theft, fire and other damages might delay your homebuilding project, they wont sidetrack it indefinitely.
Personal protection As the landowner you can be held liable for injuries that happen on your property during construction. This type of policy provides you the protection you need to fend off claims without having your personal assets threatened.
How To Shop For A Policy Without Paying Too Much
Course of construction insurance is a vital link that protects you from liability and loss during the building of your dream home. As important as it is, it doesnt make sense to pay even a cent more than you need to for coverage. After all, chances are your building project will flow fairly smoothly from beginning to end.
So, how can you save money and still get the insurance you need? There are a few things you can do to be certain your get a good policy at a price you can live with. They include:
Getting multiple quotes There are a number of companies that do provide this type of insurance. Take the time to obtain multiple quotes and so compare what all is included before making a final decision.
Vetting companies It wont do you any good to have the right insurance in place if the policy wont pay out when you need it to. Take the time to vet the reputation of the companies youre considering. Even if you do have to pay a little more for insurance to obtain a good policy, you can make up for it later in the construction process.
Setting limits accordingly Do make sure youre not going overboard with coverage amounts. If your total materials and structure are worth $200,000, it doesnt make sense to insure $300,000. Also, do make certain your limits especially in regard to liability - are set in accordance with what your mortgage company requests. Having too little coverage is almost as bad as having none.
Course of construction insurance is nothing more than a policy that will cover you if the unthinkable happens while your home is being built. It doesnt make sense to pour your lifesavings into a home project and then have it go up in smoke due to an unfortunate accident, act of weather or theft.
Whether youre acting as the owner builder or you have a contractor lined up to supervise the job, having the right coverage will provide you with peace of mind. It is possible to save money on course of construction insurance, but dont do it at the expense of proper protection.