Do I Need Homeowners Insurance When Building a Home?
You’re not living in your dream home yet because it’s still under construction. Maybe it’s only a shell at this point. Still, it’s your home, so you’re wondering if you need homeowners insurance for your custom home plans in Oklahoma City, OK.
The fact is, designing custom homes in Oklahoma City, OK comes with a unique set of risks that require specific types of insurance coverage. You may need homeowners insurance as well as a special policy while your home is being built. Here’s the scoop.
Yes, when you build a home, you need homeowners insurance. You should get this policy in place before construction begins. You’ll need liability coverage in case any incidents occur on the construction site. The policy will provide protection in case anyone wanders onto the site and is injured or any workers suffer injury while building your home. The policy will also cover your expenses if the home is damaged by fire or storm during construction.
Consult with your insurance agent about the policy limits. These will depend on the value of the home. As you establish the limits for liability coverage, keep in mind the high costs of medical bills and litigation that you may face if someone is injured on your property. You may also want to put an umbrella policy in place that will provide coverage if you reach the limits of the standard policy.
Builder’s risk insurance
Depending on the circumstances of your custom home plans in Oklahoma City, OK, you may also need builder’s risk insurance. If you are working with a major builder, you probably won’t own the land or building until it is complete, so you can skip this coverage. However, designing custom homes in Oklahoma City, OK often involves working with an individual builder. In this case, you may need a builder’s risk policy.
Check with your contractor to see what coverage they have in place. If it is sufficient, you won’t need this insurance. Be sure to ask for a copy of their certificate of insurance to verify coverage. You should also review your contract to confirm who is responsible for insuring the property while it is under construction.
The cost of builder’s risk insurance is usually based on the cost of construction. The amount you need will depend on what it would cost to rebuild the home if it were destroyed and cover any liabilities.
If you have a builder’s risk policy while your home is under construction, be sure to contact your insurance provider once construction is complete, to remove or convert your policy. You should also review policy options to determine what future coverage you have for your home. For example, if an error is made during construction that causes an injury a year from now, are you covered by the builder’s policy? It’s important to have this type of coverage in place to protect your interests down the line.
Get more answers
Don’t leave yourself open to risk while you complete your custom home plans in Oklahoma City, OK. For more information on new home insurance needs, contact the team at Perry House Plans. When it comes to construction, we do it all. From inception to installation, our team of professional designers will see to it that the vision of your dream house becomes a reality.
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