It’s finally here – you’re starting construction on the dream home you’ve been saving for! Or maybe you opted to do some major renovations to the home you’re already in. If you think that your general contractor will be responsible for any losses that could occur during the project, think again – as the owner you’ll be responsible for most losses, other than those caused by your contractor’s negligence. California home insurance won’t go into effect until your new construction is complete, and if you’re renovating a home with an existing policy it may not provide adequate coverage – you’ll need Course of Construction (COC) insurance, also known as “Builder’s Risk.”
Builder’s Risk Insurance – What is It?
A COC or Builder’s Risk policy provides coverage for buildings that are being built or under construction, both residential and commercial. Policies can be taken out to cover the entire structure, for new homes and commercial buildings, or for specific projects, such as the deck you always wanted to add out back! It’s a policy for vacant properties only, so it’s not applicable for homes that are occupied while they’re being renovated.
What’s Typically Covered
Builder’s Risk covers the value of the property being constructed, the materials at the job site (installed and uninstalled), and even materials for the project that are in transit. You’ll be covered against losses you could incur from theft, vandalism, and natural elements such as fire, wind, lightning, and hail. Some policies may also provide limited coverage for structural collapse that could occur during construction, or losses due to ordinances or laws.
What’s Not Covered
Losses from an earthquake or water damage will not be covered under a Builder’s Risk Policy. Your policy will not cover work-related bodily injury or property damage to others, so make sure to ask your agent about general liability and worker’s comp insurance.
Project Complete? You’ve Still Got Work to Do!
Just because the project has wrapped doesn’t mean that your work is done! If you’ve completed a new construction, your COC policy will no longer be in force and you’ll need to begin a California home insurancepolicy to cover your property. For remodels to existing structures, now is the time to call your agent to review the existing policy you have in place. The value of the property likely increased with the renovations, and the limits and terms of your policy need to be re-evaluated.
When you’re talking major construction, with it comes major risk.
Protect yourself and your property with Builder’s Risk Insurance.