Get a Home Insurance to Cover Risks

Now that you are building your dream house, you want the construction process to go smoothly. But home construction always involves risks. There is the possibility that your house could be destroyed or damaged by flood or fire, or you could be burglarized or other people could get hurt on your property which opens you to a lawsuit.

home insurance will provide the protection that you will need while your house is under construction. Choosing and buying the right insurance is one part of the construction process that you need not overlook.

Here are some factors to consider when choosing and purchasing a house insurance:

  • Buying insurance is important if you own the land where the house will be built and you hired a contractor to contruct the house.
  • Liability policy to protect you against lawsuits in case other people, who are not members of your family, got injured on your property. For example, a person falls and sustained injury while he is on your property under construction. A lawyer will file a lawsuit to everyone involved in the construction and you could be held responsible.
  • The liability coverage would pay for the medical expenses of the person injured or the cost that will be incurred in the event that a lawsuit will be filed against you.
  • Make sure that your contractor has an updated, adequate and right insurance coverage before he starts working on your house.
  • Request your contractor to name you as additional insured person on his insurance policy.

Furthermore, you should discuss and clarify with your contractor the ownership of materials that will be used for the construction of the house. You or your contractor may need to get a Builder’s Risk Insurance policy to cover the house and building materials during construction for theft.

Two ways to buy a home insurance:

  • Buying through a third party or intermediary such as a broker
  • Buying directly from insurance companies

Lastly, you need not take out a home insurance if the land is owned by the contractor and he is building your dream house. All the liabilities during the home construction process would fall on the contractor.