skip to main content

Building a Home

Builder's Risk Insurance - Homeowner vs GC?

11 years ago

We have decided to get builder's risk instead of having our builder do it so that we are the beneficiaries should something happen. The GC has a few million in insurance related to his business and workers comp.

Is there anything we should know about this? Any experience to share?

Also anyone know a good agent that will cover GA?

Thanks!

Sort by:Oldest

Comments (8)

melaska
11 years ago
We are the owner/builders for our construction. Our GC has a million dollar policy of his own.

We had quite a time trying to find a policy since we are building out of pocket so that really limited our search. I suggest going to a company that deals with a multitude of insurance companies.

The State Farm policy we considered would only last for a year and we didn't think we'd be done by then. Our agent finally found a company (Zurich) that would renew for another year and the premium was fairly inexpensive.

Make sure you have all the extra riders you'll need. Since we live in earthquake country (Alaska - and our town was destroyed in the '64 quake). Thank goodness this company offered an earthquake rider. The deductible is quite large but worth it.
pbx2_gw
11 years ago
OP - we just got our BRI the day before we broke ground alst week.
No words of wisdom just relaying our experience.

Our insurance agent instructed us to get coverage to match our construction cost - This covers theft & fire also + a second additional coverage part for liability in case some sues us for stepping on a nail while they are visiting.
No coverage for land - land never burns down (LOL).

So the overall coverage of both parts is about $1M.

Had flood coverage put on even though we are not on FEMA flood zone list just in case of hurricane.

OTherwise, it was short & sweet & similar to any other regular home insurance.
Related Discussions
Homewoner insurance and builder risk insurance question
Q
Comments (9)
Your builders risk policy is a homeowner's policy minus personal property coverages that are generally 70 - 75% of the dwelling coverage. Your personal property won't be there and won't need as much coverage at this location. You should definately have a renters policy for your personal property at the unit you are renting and yes it will have some liability as well. You will want your own liability coverage in the event someone walks on your property and gets hurt or a child falls into a whole/basement/well etc. As materials are delivered they will be covered which is very important. Theives like to go ahead and help themselves to materials. Fire is also covered, I had a customer do what your doing and each time he got close to being done, the house burned down to the ground. Needless to say, he didn't build again but can't sell the property neither. There will be other coverage's but that will depend on which state your in and the policy coverage's issued there.
...See More
Homeowner's insurance whilst renovating?
Q
Comments (5)
Can you get a separate floater on your stuff, like renters' insurance? Can you get a policy that is pro-rated so the parts that aren't OK (siding etc.) wouldn't be replaced in the event of a loss. (As you can imagine the insurers wouldn't replace or repair something that was already value-less in the event of a fire.) What does your mortgage lender think about this? Many, if not all, loans come with the requirement that you obtain homeowners' insurance. You may have to pay really high rates while the work is being done, but you should be able to get a better deal afterwards. If you happen to have particularly valuable personal stuff, could you store it in a safe, insured, off-site location, and therefore reduce your casualty risk, which might make you more insurable? Beware of removing everything though, as you have already found out Builder's Risk policies can be expensive and most insurance companies want to know you are actually also at risk with your stuff on site. I know of someone who had a problem with insurance (just keeping it, not making a claim) when they moved out of the house for an extended remodel. Made the insurance co. antsy about an "unoccupied" building. I'd try to find an agent who will go to bat for you and I would be prepared with endless permits, grant proposals, drawings, plans, before/after photos, and such, and make a big showing of how you are really making a concerted effort to remodel not only to code but to good condition as fast as possible. I'm sure there are crooks and cheats out there who buy wrecks, insure them and then make make bogus claims, so ins. co.s have learned to be wary. Do what you need to do to separate yourself from the bad guys. Also don't skimp on liability insurance if you are having people come in to help you. Of course all contractors and subs need proof of their own insurance, but if you have friends or casual labor working there you need to have insurance in case someone gets hurt. Including, in some areas, worker's comp. insurance. You could easily lose your house if someone is injured while working there and sues you. (And they would!) Molly~
...See More
getting your own builders insurance
Q
Comments (5)
We were told that on our build, because we are owner/builders, getting insured would't happen. This was one persons statement that we never followed up on. We have insurance in the event that we get injured, and the subs that we have used have their own insurance and bonded as mandated by our state.Their insurance covers a situation where they do damage to the house, or if the work they performed leads to something disastrous, something to that effect. If we hired any help outside of a licensed/bonded subcontractor, we would be required to have workmans comp for that hired person. You would be wise to make sure that all your subs are covered by their own insurances and look into getting an addition to your homeowners policy that will cover your project in the event of an incident that is not covered by any subs or your builder/carpenter. Make sure you and everyone concerned is covered.I would check into your insurance company that covers your homeowners policy for advice. I dont know how this will save you money,but will probably be an extra expense that you would be wise not to go without.
...See More
General Liability vs. Builder's Risk
Q
Comments (14)
I may be totally off the mark for your needs, but I have a few observations to share. In the state where I live, this is how we do it: 1. Contract requires builder and his subs to have general liability insurance, ($1 million minimum, subs might be less) workman's comp AND auto liability. 2. * Contract states builder and subs shall provide homeowner with a certificate of insurance naming homeowner as Additional Insured. 3. Contract contains language re: lien releases and partial payments. * This one is a "gotcha" in our State. If the contract doesn't require the builder to name you and provide you with the certificate, then, even if you get a certificate naming you as additional insured, it is worthless. This is specific in our State laws. You may have a great relationship with your builder, but if one of his workers has a freak injury on your job - or hits someone when he is picking up materials for your job, the affected families are not going to be kind if they decide to sue you. For us, the cost of item 2 (getting the certificate of insurance showing that we are named as additional insureds) costs between $0 to $150. We always pay for that and consider it money well spent. I just encourage you to do your homework on this one. Find out how all of this works in your State. None of this is that expensive compared with the cost of the home or the price of a lawsuit. Insurance shouldn't be a deal breaker with your builder, particularly if you offer to pick up the excess costs. Finally, in our State, one cannot get a contractor's license without a general liability policy in place. Please check your State requirements. There is a lot we don't know about your situation and your comfort with risk. You are the one we care about in this situation and we want you to be informed and to understand that the builder is shifting most (all?) of the risk on this project to you. So be careful. Edited to explain: your insurance will not cover you for injuries caused by your builder's negligence. His will cover you but only if you are added as additional insured.
...See More
mcakeshop
11 years ago
We just got ours as well. Our agent got it through Zurich. He mentioned only a handful companies actucally offer this coverage so your options might be limited.

The policy is good for a year, but you don't get back any money for any unused coverage/time period, i.e. if it takes 4 months or 12 months it sill costs $xxx
gaonmymind
Original Author
11 years ago
We got a quote from Zurich as well. Seems like every deductible is $2500. We thought that was high or is that standard?
pbx2_gw
11 years ago
For your comp - our deductible is $500.
User
11 years ago
You may need to clarify when materials and equipment belong to you and are covered under your insurance instead of the contractor's insurance.
PRO
Window Accents by Vanessa Downs
11 years ago
We carried the insurance policy ourselves through Travelers and then converted it to homeowner's once we finished the house and moved in.

The only problem we had during the build was a small case of vandalism (broken window) and our deductible was too high to cover that anyway. Thankfully we never had to "USE" the policy.
gaonmymind
Original Author
11 years ago
Thanks everyone! We went with an insurance company that we have a policy with for another property we own. Got a good rate for having another policy and a discount for paying in full!

Related Stories

BATHROOM WORKBOOK How to Remodel a Bathroom

By Mitchell Parker

Create a vision, make a budget, choose your style and materials, hire the right pros and get the project done

MOST POPULAR How to Remodel the Laundry Room

By Mitchell Parker

Use this step-by-step guide to figure out what you want and how to make it happen

MOVING 5 Risks in Buying a Short-Sale Home — and How to Handle Them

By Christine Tusher

Don’t let the lure of a great deal blind you to the hidden costs and issues in snagging a short-sale property

KITCHEN WORKBOOK How to Remodel Your Kitchen

By KitchenLab Interiors

Follow these start-to-finish steps to achieve a successful kitchen remodel

MOST POPULAR Homeowners Give the Pink Sink Some Love

By Mary Jo Bowling

When it comes to pastel sinks in a vintage bath, some people love ’em and leave ’em. Would you?

WORKING WITH PROS Beyond the Warranty: Builders Respond to Those ‘Oh, No’ Calls

By Erin Carlyle

See how three building pros deal with real problems that come up after the warranty period ends

REMODELING GUIDES 10 Tips for Choosing and Working With a Builder

By Tugman Studio

Make your construction experience a happy one by following these steps

WORKING WITH PROS How Long Is Your Contractor on the Hook?

By Erin Carlyle

Understand how a warranty protects homeowners from shoddy work — and builders from being liable for their work for forever and a day

MOVING Hiring a Home Inspector? Ask These 10 Questions

By Christine Tusher

How to make sure the pro who performs your home inspection is properly qualified and insured, so you can protect your big investment

SELLING YOUR HOUSE 7 Must-Dos on the Day You Show Your House

By Lurdes Abruscato

Don’t risk losing buyers because of little things you overlook. Check these off your list before you open the front door

Sponsored

More Discussions

What splurges in square footage do you love about your home?

19

Please critique my floorplan

47

Which quality is good for framing a house and the subfloor

11

What vanity countertop with this shower tile/vanity color?

5

Ranch House Exterior Design help!

14