What is Builder’s Risk Insurance?
Builder’s Risk Coverage is used to provide coverage during the period of construction for a new building or additions/renovations to an existing building.
What does it cover?
When this endorsement is purchased, it provides coverage for the building under construction or being renovated for the causes of loss identified for the building. Also provided is coverage for theft in or to the building as well as the construction materials and supplies used in the construction until the building is finished.
Who pays for builder’s risk insurance?
The owner of the building is responsible for purchasing the coverage and insuring the building under construction.
John Smith decides to purchase land to build a house on. John plans to build a $200,000 home on this property. While the house is being built, the builder’s risk coverage should be purchased in the amount of $200,000 to cover damage to the house due to the causes of loss identified in the policy. Once the house has been completed, the limit of insurance should be reviewed with his agent to ensure that the $200,000 reflects the accurate limit of insurance needed for this home.
Talk to a local agent to learn more or reach out online for a quote.
Author: Sara Grade, Senior Product Specialist at Rural Mutual Insurance Company