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WHY DO I NEED BUILDERS RISK INSURANCE IF I ALREADY HAVE HOMEOWNERS INSURANCE?
If you’re planning a new home construction or renovation, you may wonder: “Why do I need builders risk insurance when I already have a homeowners policy?” It’s a common question, and the answer lies in the significant differences between these two types of insurance.
While homeowners insurance is invaluable for protecting your property in its completed state, it often doesn’t provide the robust coverage you need during the course of construction or renovation. Builders risk insurance fills these gaps, offering peace of mind by covering the unique risks associated with construction projects.
PROTECT YOUR INVESTMENT DURING CONSTRUCTION
Whether you’re building a home from the ground up or undertaking a renovation such as adding a new room or remodeling your kitchen, unforeseen losses can quickly derail your project and create unexpected expenses. Builders risk insurance is specifically designed to safeguard your investment during this critical time.
Without consulting an insurance professional, many homeowners mistakenly assume their existing homeowners policy will extend to cover construction-related risks. However, these policies are typically designed to protect:
- The existing structure of your home
- Personal belongings inside the home
- Liability for accidents occurring on your property
In contrast, builders risk insurance is tailored for construction projects and covers:
- Materials, fixtures, and equipment to be installed
- Physical loss or damage to the property during construction
- Certain risks that are excluded from homeowners policies
KEY DIFFERENCES BETWEEN BUILDERS RISK AND HOME INSURANCE
Builders Risk Insurance
Builders risk insurance is temporary property coverage designed to protect construction or renovation projects. It covers your financial interest in materials, equipment, and fixtures from risks such as theft, fire, vandalism, and severe weather while the work is in progress.
Homeowners Insurance
Homeowners insurance is a long-term policy that protects your completed home and its contents. It also provides liability coverage for accidents on your property, but it isn’t designed to cover risks associated with active construction or remodeling.
BENEFITS OF BUILDERS RISK INSURANCE
When you purchase builders risk insurance, you gain specialized protection that minimizes claims on your homeowners policy and ensures your project is financially secure. Some key benefits include:
- Flexible Coverage: Builders risk policies can be customized to include or exclude coverage for the existing structure during remodeling.
- Peace of Mind: Should a loss occur during construction, your builders risk policy will handle the claim, preserving your homeowners policy for everyday risks.
- Adaptability: Coverage can be extended or renewed as projects evolve, and limits can be increased to account for contract change orders or rising material costs.
WHY IT'S SO IMPORTANT TO SPEAK WITH AN INSURANCE ADVISOR
Every construction project is unique, and not all policies are created equal. A trusted insurance advisor, like American Eagle Insurance, can assess your specific needs, identify gaps in your current coverage, and recommend the best policy for your project.
If a loss occurs during construction, and your homeowners insurance doesn’t cover it, you could face significant financial strain. Builders risk insurance ensures you’re prepared for these situations, so you can focus on completing your project with confidence.
PROTECT YOUR PROPERTY WITH AMERICAN EAGLE INSURANCE
At American Eagle Insurance, we’ve been helping homeowners protect their construction projects since 1967. Our expertise in builders risk insurance allows us to provide tailored solutions that safeguard your investment and offer peace of mind during the construction process.
Don’t let unexpected losses disrupt your plans. Contact American Eagle Insurance today to learn more about builders risk insurance and find the right coverage for your next project.
Builders risk insurance is essential for any individual or entity with a financial interest in a construction or renovation project. This includes:
- Contractors: Protecting tools, equipment, and materials during the building process.
- Homeowners: Safeguarding their financial investment in custom builds, renovations, or home additions.
- Developers and Business Owners: Covering large-scale commercial projects and the assets involved.
- Financial Institutions: Ensuring loans tied to construction projects are secured against unforeseen risks.
Depending on the terms of the construction contract, builders risk insurance can be purchased by the owner, contractor, or both. Additional insured parties, such as subcontractors, may also be covered under the policy.
Builders risk policies offer broad protection against various risks. Common coverage includes:
- Property Damage: Safeguarding the structure under construction from fire, vandalism, theft, and other perils.
- Materials and Equipment: Covering items on-site, in transit, or stored temporarily.
- Soft Costs: Protecting against delays and associated costs, such as lost income, extra expenses, and interest on loans.
- Valuable Papers: Ensuring documents such as blueprints or permits are protected.
- Ordinance or Law Compliance: Covering the costs of adhering to updated building codes during reconstruction.
- Pollution Cleanup and Debris Removal: Ensuring quick recovery and cleanup after an incident.
- Scaffolding and Construction Forms: Providing coverage for equipment essential to the building process.
Optional endorsements, such as flood and earthquake coverage, are also available in certain locations.
At American Eagle Insurance Agency, we bring over 50 years of experience to every policy we write. Our builders risk insurance offers unparalleled benefits:
- Flexible Policy Options: Choose from single-project, blanket, or reporting-form policies to fit your needs.
- Comprehensive Protection: Coverage for a wide range of risks, ensuring your project is protected from start to finish.
- Expert Guidance: Our team works with you to assess your project’s risks and recommend the best coverage options.
- Quick and Easy Setup: We make it simple to get your policy in place, with fast approvals and responsive support.
- Adaptability: Our policies can be endorsed to account for changes in total project value during construction, ensuring no gaps in coverage.
