If you’re hiring a general contractor to build a custom home for you, you need to understand how important course of construction insurance is in this scenario. Also known as builder’s risk insurance, this kind of insurance will help you protect your property while it’s under construction.
What Is Course of Construction Insurance?
COC insurance will cover the area where your property is being constructed but it can also cover only the structure or the materials that are being kept on-site or that are transported to the location.
This kind of coverage will cover damages up to a specific amount. This limit needs to reflect the value of the kind of property that’s being built in an accurate manner.
Often, the budget for construction is the best way to determine the insurance limit and the coverage can last 3, 6, or 12 months. If the project is not done within the time limit, extensions can be done one at a time until the custom property is finished.
Course of Construction Insurance Coverage
Builder’s risk insurance in Oklahoma is something that owners need because it will provide the coverage they need to protect their investment in the project. Most policies will cover damage to the structure caused by fire, lightning, wind, hail, theft, vandalism, vehicle or aircraft, and explosion.
Of course, just like all insurance policies, builder’s risk insurance for homeowner has limitations and exclusions, such as water damage, weather damage, earthquake, employee theft, voluntary parting, government action, contract penalty, and mechanical breakdown.
When you’re looking at COC insurance, you need to be familiar with the limitations and determine exactly what’s being covered so you can decide if it’s the right fit for you when you’re comparing quotes.
COC Insurance for Property in the Middle of Building, Renovations, or Remodeling
If your home is in the middle of construction or you’re doing extensive renovations or remodeling, you need to understand how strict insurance companies can be about properties that are vacant, unoccupied, or under construction.
Some property insurance policies will be suspended when the property is vacant or unoccupied or has been for longer than a specified number of days.
However, when a property is either under construction or being renovated, remodeled, or repaired, it may not always be considered vacant or unoccupied. So if you already have coverage, it may not be suspended.
If you’re having a custom home built for you, you won’t require a complete homeowners insurance policy. The best option is to get COC insurance, which is a stand-alone policy that will cover your bases perfectly. Either way, dwelling under construction insurance offers a provisional amount of coverage and it’s based on the expected value of the completed project, as we mentioned before.
All in all, course of construction insurance is exactly what homeowners need if they’re hiring contractors to build their dream home. The objective of this kind of policy is to provide coverage for damage and personal injury so the owner doesn’t have any legal or financial issues.