A builders risk policy is a specially designed property policy that covers an owner’s and or builder’s interest in materials and fixtures being installed in property. The builders risk policy can cover property being built from the ground up or during remodeling.
Porter-Brandenburg Agency specializes in writing builders risk policies for new ground-up construction as well as for remodelers, “fixer-uppers”, “flippers” and homeowners. We love to work with new home builders and serial remodelers because there is always a touch of excitement in their voice on each new project. We have blogged about the builders risk insurance product several times over the last few years and we urge you to read some of our prior articles whether you are building for the first time or even if you are a professional builder.
Our agency has been around since 1984 and as an independent insurance agent, we are not limited to the underwriting decision of a single insurance company. Some insurance carriers have a limited appetite for risk and will not offer a policy for a second story addition or foundation work.
Even though we have written several articles on builders risk, we have never addressed the topic of “when coverage ceases.” This is important because you do not have a claim denied because you were not in compliance with policy provisions.
When Does Coverage End On A Builders Risk Policy?
To answer to that question it is recommended that you read your insurance policy because the language varies by insurance company and some are more liberal than others. Our agency writes 95% of our builders risk polices with Liberty Mutual, Zurich and Navigators and each carrier has slightly different language for when coverage ends.
Since Liberty Mutual writes most of our builders risk policies, we will use the Liberty Mutual policy language for “when coverage ceases.”
Coverage will end when one of the following occurs:
- policy expires or is cancelled
- a covered building or structure is accepted by the purchaser
- your insurable interest in the covered property ceases
- you abandon construction with no intent to complete it
- a covered building or structure has been completed for more than 30 or 90 days.
The period of completion time frame allowed by Liberty Mutual depends also upon the coverage form. The 90 day time period is granted for new homes built from the ground up. The 30 day time period is for “Rehab” forms. Liberty Mutual as well as most other insurance companies do not permit occupancy during the term of a builders risk policy unless permission is granted in writing.
Be sure to let your insurance agent know that you are living in the home while adding a wing onto the house and make sure the policy is endorsed with permission for occupancy. If you are the homeowner and you are hiring a contractor to do the building for you, be sure to ask for an insurance certificate to prove that the contractor carries general liability and workers compensation because the builders risk policy only pays for damages to the property itself for perils such as fire, theft, wind, hail etc.
Call 972.234.5588 for a Dallas builders risk insurance quote.