construction88's notebook

Construction Insurance for Owner-Builders

 

Owner-builders are individuals who construct or renovate a building on their own land, and are not professional builders. They take on the responsibilities (and the associated risks) of a qualified and registered builder. If you are an owner-builder, you need to be aware of public liability and construction insurance, which protects your home during its construction phase.

 

What are the risks that could result in damage and the resulting financial loss? They include fires, high winds, theft, vandalism, and issues arising out of poor workmanship. Importantly, the insurance covers you against damage or injury claims filed by any third-party, and damages for which your sub-contractors many be responsible.

 

You should take out the insurance before the construction work commences. Taking it out early will not raise the premium, as this is rated by insurers on the basis of the home-project value. Public liability insurance also assumes importance here, as you will be liable in the event that people are injured on your empty land.

 

The construction insurance you take out will cover the financial losses borne only upto the point of sustained damage, and not the implied home value. So, if you are constructing a $200,000 home but have invested just $80,000 when a fire ravages the structure, you will receive only $80,000.

 

To protect your interest in the materials used and work that has gone into building your home, it is a wise decision to get public liability and construction insurance. You can get this insurance from all leading insurance companies. Shop around for the best rates and engage the services of an insurance broker to help you get attractive quotes, and better understand the ins and outs of such insurance policies. Importantly, before you buy the insurance, make sure that you read your policy carefully to check its exclusions and limitations. As it is a matter of financial security, it is advise construction insurance be to conduct a careful assessment before taking the plunge.