If you’re building a new home, congratulations! However, if you purchase homeowners insurance on your new residence during construction, you’re exposing yourself to a huge risk if a fire, theft, or other event damages or destroys your partially-completed home.
You can protect yourself by purchasing a standard homeowners insurance policy on the new dwelling. This will cover you for any damage to the home as it’s being built, and might also provide some insurance coverage for theft of building supplies (although the building contractor’s insurance should also cover this). The homeowners insurance policy includes liability insurance, which would come in handy if one of your friends trips during a “tour” of your dream house and decides to sue you. However, homeowners insurance will not cover your personal property until the building is secure or “lockable.” Once construction reaches this point, you can add coverage for your personal property.
As an alternative, consider a dwelling and fire policy, which covers damage to the physical structure, but provides no theft coverage. This might be an appropriate choice if you’re living in your old house during construction, because the homeowners policy on this dwelling would cover theft of items from the construction site. Dwelling and fire insurance also provides liability coverage.
Once your new home is complete, it makes sense to re-evaluate your coverage. If you chose dwelling and fire coverage, you might want to replace it with a homeowners policy. If you have a standard homeowners policy, make sure that you have insured the home to its full value, especially if you have altered the original building plans (for example, by adding a room or upgrading building supplies).
If you have any questions about protecting your new home while it’s being built, just give our Tracy-Driscoll insurance specialists a call at (860) 589-3434. We’re always here for you!