Builder’s Risk Insurance: Protecting Your Home Construction Project From Start to Finish

A 2020 survey found that 38% of Gen-Xers were either in the midst of or planning a renovation project. That means there are plenty of homes that are either vacant or in mid-construction right now.

No doubt, most of these savvy customers have already factored home insurance into their calculations. The problem is that if the worst happens, like a fire, flood or theft, your homeowners’ insurance often won’t cover it. 

Having builder’s risk insurance is the best way to protect yourself from potentially huge costs if something goes wrong. But what does builders’ risk insurance cover? And do you really need to get it for simple home renovations?

Let’s take a deep dive and find out what everyone should know about builders’ risk insurance coverage.

What Is Builder’s Risk Insurance?

If you get builder’s risk insurance in time, it will protect your home throughout the project. From the moment the first hammer is struck to the time the contractor hands over the keys to your new home, you won’t be exposed if you get burgled or your home floods.

If you don’t have the right level of coverage, you could find yourself seriously out of pocket. Just imagine if you had to cover the cost of fire or flood damages out of your own pocket while deep in a construction or renovation project!

Different from Contractors’ Insurance

But wait, you could read this and think, isn’t this something that the builder should arrange? You could be forgiven for thinking so, but it’s not always the case.

Builders should take out contractors’ insurance and it’s important to check that this is in place before they start work. This is a form of general liability insurance that protects the contractor and their property. But if something goes wrong in your property during the build, you’re unlikely to be covered.

That’s why when you hire a contractor for new home construction, they may require you to provide builder’s risk insurance as part of the contract. 

Not Just for New Construction

Do you need builder’s risk insurance for renovations too? You usually do. Again, if you’re completing major renovations, your contractor may make it a condition of the contract. 

Anyone who is planning to fix and flip a home should also invest in builder’s risk insurance. The house will be vacant while the home renovations are being carried out, making it a target in the local area. 

When you call your insurer, talk to them in detail about the project. They may not be able to provide you with a yes or no answer right away. Ask the question in plenty of time so you can make arrangements for builder’s risk insurance if they can’t cover you.

What Does Builder’s Risk Insurance Cover?

Builder’s risk insurance covers the entire building. So if you’re adding a back addition to your house, it will cover that. But it will also cover the roof if something goes wrong during the period the home is under renovation.

Unfortunately, building sites can attract thieves. Builder’s risk insurance covers the construction supplies that are left on-site during the new home construction or renovation. It also provides coverage if an act of vandalism or arson takes place. 

Additional coverage may include:

  • Temporary buildings and structures such as scaffolding
  • Temporary infrastructure
  • Landscaping
  • Equipment breakdown
  • Wrap up liability cover – protects contractors and subcontractors

Not all builder’s risk insurance policies provide the same level of coverage and some may offer add-ons. Talk to the provider or your broker about the scope of your project before deciding the level of coverage you need. Your contractor will also be able to advise.

Do We Need to Stay On-Site?

Many families prefer to move out while renovations are taking place. This is often when people leave themselves even more exposed with their existing policies. Most regular home insurance policies do not provide vacant home insurance. 

However, builder’s risk insurance includes vacant building insurance. You can choose either to remain on-site or temporarily move out during the construction period. This will also provide coverage for new homes that haven’t been lived in yet.

How Can You Obtain Builder’s Risk Insurance Quotes?

You shouldn’t be surprised if you call your regular insurance provider and hit a brick wall when you ask for builder’s risk insurance quotes. Many mainstream insurers are not interested in providing this kind of coverage. Your best option is to work with James Inwood, who operates as an independent insurance broker.

James Inwood is able to obtain quotes from a large range of insurers that specialize in handling this type of insurance. Because he’s not tied to a single insurance provider, his team can scour the market to find the best coverage.

What Information Will a Broker Need?

The more information you can provide James Inwood about your renovation project, the more tailored a quotation he’ll be able to obtain. Collect the following information before making the call:

  • Information about your property
    • Square footage
    • Age
    • Type of house
    • Projected value after renovation
  • Previous insurance claims
  • Details about the project
    • Type of renovation or new construction
    • Start date
    • Estimated cost

What if you realize at the last minute that your insurance provider doesn’t cover the renovations? Don’t panic. Just call James Inwood as soon as possible and let him find the best quotes so the project can get started without delay.

Trust James Inwood to Find the Best Builder’s Risk Insurance

Whether you’re building or renovating, it’s clear that you need builder’s risk insurance. 

You might be tempted to take a chance and rely on your existing homeowner’s policy. But without residential construction insurance or home renovation insurance, it could all end in tears and years of debt.

Rather than taking a risk, talk to James Inwood. He is ready to discuss your project and help you find exactly what you need. As an independent broker, James works with over 40 insurance providers to find you the right deal at an affordable price.

Call today 647-966-7093 or send a message online to get the process started.

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James Inwood is a member of Canadian Insurance Brokers Inc. CIBI operates across Canada with more than 40 licensed brokers and is completely independent so our advice is always objective. Representing 14 insurance carriers on the personal side and over 20 insurance providers on the commercial side helps give my clients clear choice and competitive pricing.

James Inwood, Insurance Broker
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