Renovating your home: Do you need Dwelling Under Construction or Builders Risk?

Are you thinking about renovating or remodeling your home or your investment property? Are you trying to add square footage or upgrade your kitchen, bathrooms, or add a room? The first person you should call is NOT the designer, architect or general contractor. The first person you should contact is your homeowner’s insurance agent!

Your beautiful home could be at risk by not having the right coverage or having major gaps, where you as the client could be paying tens or even hundreds of thousands of dollars out of pocket. The type of insurance policy that you have on your home during construction is a major factor in whether a claim will be covered or denied.

What is Dwelling under Construction Coverage?

For homeowners, there is the Dwelling Under Construction coverage for residential builds. Builders Risk is a commercial insurance policy to provide coverage during a construction build. Each carrier has different guidelines and limitations for coverage options for the dwelling that is under construction or being renovated. The company’s guidelines will determine whether it should be a personal or commercial policy.

Some answers that you will need to provide to your agent are:

• Is it for your owner-occupied home or an investment property?
• Will you be living in the home during the entire project?
• Will it take longer than 6 months?
• Is the Building Contractor Licensed, Bonded, Insured, and willing to provide certificates of insurance?
• Will you the Named Insured be doing any of the work in the project?
• Are you renovating existing space or are you adding new construction?
• Are you adding more than 40% of the total square footage of your existing home?
• Are you updating or upgrading the quality of your home?

Depending on your answers, you may not have the right coverage with your existing homeowner’s insurance policy.

How does Dwelling under Construction Coverage work?

Simply put, dwelling under construction coverage is an endorsement that you can add to your home insurance policy either during or ahead of a construction project on your home. Your standard homeowner’s policy won’t cover burglary, pipe freezes, or updates to your house if it’s considered to be under construction.

If you’re planning an extensive home remodel or renovation project, check with your insurance company to see if this endorsement is necessary. A simple kitchen renovation or basement finishing project may not require any additional coverage. But adding a new section of home or remodeling the entire inside might be viewed as a construction project to your insurer, especially if your home will not be occupied during construction.

Your independent agent will be able to help you determine which type of policy you will need during construction and the updated coverage for your renovated home. Your agent will also provide you with peace of mind knowing that your home is protected pro.

We provide Dwelling under Construction or Builders Risk insurance coverage in Newton, Needham, Wellesley, and all of Massachusetts. Contact Kovalev Insurance for construction insurance and request a complimentary consultation to ensure you are properly protected.