Builder’s Risk

Auto, Home, Business Insurance for Alvin, Pearland Texas

Builder’s Risk

Builder’s Risk Insurance policy is used to insure buildings that are under construction.  This could be new construction or a substantial remodeling project. The builder’s risk policies are not a standardized form, which means there are many different policy forms.  These policy forms can vary greatly.

There are certain items you should looked for regarding a builder’s risk policy.

An all risk with exclusions form.  The number of covered perils is superior under an all risk with exclusion policy verses a basic named peril policy.

Be sure theft coverage is not excluded.

Do you want your tools covered?  Generally the premium for a builder’s risk insurance  policy is reasonable. On a single new construction home the builder’s risk is often done on a 6-month policy and the beginning value is zero. As a result, the premium will reflect one fourth the annual property premium.

There are certain issues that you need to be aware of:

First: Who purchases the builder’s risk?  Generally a large general contractor will provide the builder’s risk.  The large general contractor will probably have a policy that is on a reporting form basis.  The GC will report the project’s construction values monthly to his insurance company.

But if you are dealing with a small general contractor or if you are purchasing the materials, you need to be a named insured.  If there is a claim, you want your name on the claim check. The simplest way to be the named insured is to acquire the builder’s risk yourself.

Generally the GC may be responsible for any damage caused by his negligence, but the owner is responsible for most of the other property losses.  A contract should identify each party’s responsibilities.

Secondly: If your project is in a coastal area, it is common that the insurance company will exclude the windstorm and hail perils.  The wind and hail coverage would then be provided separately, probably through the Texas Windstorm Insurance Association, TWIA. If you are dealing with the TWIA, you need an agent that is familiar with the constantly changing TWIA rules and underwriting.  For instance, to save half of the premium, if you use the TWIA for new construction, the policy inception date needs to be before any construction work is performed.

Thirdly: The builder’s risk policy is designed to terminate upon the completion of the project.  As a result, get the appropriate property replacement policy immediately upon completion.

We hope this helps you with your building project.  If we can be of further service, contact us at your convenience.

Builder’s Risk Alvin TX

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