The short answer is no. There are just too many coverage gaps and / or inadequate limits.
The missing coverages during new home construction or remodeling might not be obvious until a loss occurs. At that point, your clients might face some unpleasant surprises - that they may not have the protection they expected.
Homeowners involved with new home construction or remodeling often think their homeowners insurance will cover the project. However, a standard homeowners insurance policy does not offer adequate coverage for many risks that personal lines clients face. As a result, clients may be at risk of expensive financial losses. That’s why it’s critical to counsel clients about the significance of home renovation insurance.
Consider these four reasons why homeowners need a builders risk policy during construction.
Builders risk for remodels or new home construction is the best coverage option. It offers complete coverage for construction under one policy. This is better than adding coverages to a homeowners policy.
Under our basic builders risk insurance policy backed by Zurich, covered property and losses can include perils like:
With additional coverage endorsements, your client can add protection for natural disasters like floods, earthquakes, and windstorms. They can also cover soft costs, property in transit, temporary storage, debris removal, and more.
Most homeowners make contract change orders during construction. These changes often increase the total completed value. Our builders risk insurance offers an add on coverage for change orders in increments up to 30%.
Builders risk insurance for homeowners closes critical coverage gaps and offers financial protection during construction.
Let’s say your client needs to have debris removed after a loss. The Builders Risk Plan insured by Zurich will cover $50,000 for projects up to $5 million, or $100,000 for project values over $5 million. A typical homeowners policy usually limits this amount to 5% of the dwelling's cost. Separate limits for tree removal can be $500 and $1,000.
And let's say that a covered cause of loss damaged some of the construction scaffolding, and you need to replace it. With Zurich Builders Risk, your client can receive protection up to $50,000 based on their project value. This type of coverage isn’t available with typical homeowners insurance.
Through the Builders Risk Plan insured by Zurich, you can easily secure a robust policy for projects valued up to $75 million. Our basic builders risk policy includes many coverages. You can also increase sub-limits to fit your clients' specific project needs.
For home remodeling projects covered with builders risk, the policy term could be six, nine or 12 months, and coverage can be extended pending underwriting review and approval. On top of that, homeowners can protect their home for the renovation only or for the renovation and the existing structure.
The standard policy term for a new dwelling under construction is 12 months. This single structure or “one shot” policy can also be renewed with underwriting approval.
If your client has builders risk insurance and something happens, they file a claim under the builders risk policy, not the homeowners policy. That means they don’t have to worry about their insurance company cancelling them or increasing rates in the future because you've found the best home renovation insurance in the country.
If your client has plans to build or remodel, they need your guidance. Discuss how home renovation insurance helps homeowners protect their investment and avoid potentially costly losses not typically covered under permanent property policies.
To learn how the Builders Risk Plan insured by Zurich stacks up to a typical homeowners insurance policy, download our Homeowners Coverage Comparison. In it, you’ll learn about the coverage gaps that could await your personal lines clients who rely on homeowners insurance during construction.
This is intended as a general description of certain types of insurance and services available to qualified customers. Any description of policy provisions is meant to give a broad overview of coverages and does not revise or amend a policy. Refer to the policy coverage form for a complete representation of the scope of coverage, terms, conditions, exclusions and more. The policy is the contract that specifically and fully describes your coverage. Some products may not be available in all states and may only be offered on a non-admitted basis. Product availability is subject to change.
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