When building your dream home, there’s more to consider than just the layout, finishes, and location. One crucial step often overlooked is making sure that your new home is properly insured both during and after construction. Understanding homeowners’ insurance for new construction homes is an important part of protecting your investment and avoiding costly surprises. Here are 5 key things to know that help you stay covered from the ground up.
1. Insuring a Home Under Construction
If you’re building a home, you need to have insurance coverage during construction. A traditional homeowners insurance policy won’t apply until the build is complete, so you may need a builder’s risk insurance policy to cover potential risks.
Builder’s risk insurance typically protects against damage caused by:
- Fire
- Theft of materials
- Vandalism
- Weather-related incidents
Builders typically have this type of coverage, but as the homeowner, you may want to review the policy to make sure it works for your needs. If your builder doesn’t provide coverage, you can also speak with your insurance agent about getting a policy for yourself.
2. Customizing Coverage for a Newly Built Home
Once your new build is finished, it’s time to transition to a standard homeowners insurance policy. A newly built home offers an excellent opportunity to customize your coverage from the beginning. Here are a few things to consider when choosing the best policy for you:
- Replacement Cost Coverage: Make sure your policy covers the full cost of rebuilding your home using current materials and labor prices.
- Upgraded Features: If you have custom features or high-end finishes added to your home, it’s important to make sure they are accurately reflected in your coverage.
- Earthquake or Flood Insurance: Standard policies don’t typically include flood or earthquake coverage. If your home is in a high-risk area, talk to your insurance agent about your options.
3. Work Closely with Builders and Insurance Agents
Building a home involves a lot of moving parts, and communication is key throughout the process to make sure you’re properly protected. It’s important to work closely with your builder and insurance agent to address potential risks. Here are some examples of what you can do to confirm the best coverage for your needs:
- Confirm Builder’s Liability Insurance: Your builder should carry liability insurance in case of any accidents on-site. Request proof of coverage and keep a copy for your records.
- Document the Process: Take photos and keep receipts for materials, upgrades, and fixtures during the construction phase. This documentation will be helpful if you need to report replacement costs when filing a claim.
- Discuss Potential Gaps: Your insurance agent can also help you identify any potential gaps in coverage during construction and after your home is complete.
4. Understand Additional Coverage Needs
Beyond the basic homeowner’s policy, you may want to consider additional coverage options for added protection. These are a few examples of additional coverage options for a new build:
- Personal Property Insurance: Make sure your belongings are covered against theft or damage.
- Liability Coverage: Liability coverage protects you from legal and medical expenses of guests at your home.
- Home Systems Protection: New homes often come with brand new systems like HVAC, electrical, and plumbing, and some policies provide endorsements that cover unexpected repairs or breakdowns.
5. Take Advantage of Discounts for New Homes
One benefit of properly insuring a newly constructed home is the potential for lower premiums. Many insurance companies offer discounts for the following:
- Energy-efficient systems
- Updated plumbing and electrical systems
- Homes built with fire-resistant materials
- Homes located in gated communities
Talk to your insurance agent about what discounts are available to you and how you may qualify.
Protecting Your Dream Home from Day One
Building a home is an exciting journey, and getting the right insurance in place provides you with peace of mind as you settle into your new space. Start with customized coverage, work with trusted builders and agents, and understand potential risks so you can enjoy your new home with confidence. For more money-saving tips and advice on protecting your assets, talk to a Signature Insurance agent and learn how to make smart, frugal decisions for your new home!