Building a new home can be an exciting time in your life, especially if it is your dream home. When you have worked, scrimped and saved to build a new home, the last thing you want is for some horrible unforeseen event to happen that could potentially ruin it for you. That is where insurance comes in. If you are considering building your dream home, you might need insurance to protect you.
Insure Before You Build
The time to check on coverage for your dream home is while you are still dreaming. Before purchasing land or a lot to build on, check to make sure there are no issues that could cause your new home to be uninsurable if built in that location. For instance, if you are going to build near a floodplain, you may have trouble getting an insurance company to sell you a policy. Or, if you are able to get a policy it may cost you two, three, or even four times what it would cost to build elsewhere. Don’t leave insurance as the last thing on your list because doing so could cost you thousands.
Don’t make the mistake of thinking just because your contractor carriers insurance you, your property and your interests are covered. This type of insurance policy may only cover the builder in case of a loss during construction. Ask about the details of the policy to find out what it covers and what it doesn’t. Make sure it includes:
Workers Compensation Coverage
You will want to ensure there is workers compensation coverage for any workers the contractor employs as well as coverage for any injuries that could happen to any subcontractors while on the property.
In addition, you should make sure the policy has liability coverage in case an accident happens to a third party on the property. For example, if a curious child starts looking around and falls, resulting in an injury, you want to make sure you have insurance to cover it.
You may also want to consider whether coverage is in place for theft, fire, flood, and weather damage that could occur while your new home is under construction. If you live in the UK, you might also need structural defects insurance or a home warranty to cover appliances or other systems for your new home.
Do you feel there are gaps in the coverage the contractor has? Contact an insurance agent if you think you need to purchase your own policy. The last thing you want to find out after an accident happens is that you have no coverage. You could end up with thousands of dollars of damage or a potential lawsuit from an injured party. Either scenario could financially ruin you.
Once the construction of your new home is complete and you are ready to move in, it’s time to make sure you are covered through a regular homeowner’s policy. Check to make sure you have the right amount of coverage and stay away from actual cash value policies that could cost you thousands when you get ready to make a claim. Find out what the policy doesn’t cover so you have no surprises down the road. Keep good records of your possessions and review your insurance policy from time to time to make sure you do not need additional coverage.
Building a new home is exciting, but make sure you have the coverage you need to keep you there for many years to come by purchasing the right insurance and the right amount of insurance.
Don’t forget – There is plenty more information by visiting the government Self Build Portal.
If you are building your dream home, what other insurance might you need?