Home Building Articles

Insurance Checklist - New Home Construction

October 27, 2009

Insurance Checklist - New Home Construction
  • Check with your bank/Lending Institution as to what amount of insurance you will be required to carry. Determine what policies will have to be issued by your closing date.
  • Determine if your location is in a designated flood zone. If so, flood insurance will be a requirement as opposed to optional. A "pre-construction elevation certificate" will be required to secure a flood policy if you are in a flood zone. It can be secured from a survey company based on your building plans even though no construction has started.
  • Determine if your location is in a designated "Wind Pool". If so, your builder's risk insurance will automatically exclude windstorm/hail as a covered loss. You will be required to purchase an additional "Texas Windstorm Insurance Association" policy to cover windstorm/hail.
  • Builder's Risk Insurance should be purchased when the building project is started.
  • Ensure that "THEFT" is a covered cause of loss on the Builder's Risk policy you purchase.
  • Builder's Risk policies are considered a "fully earned premium" policy which means that the full premium must be paid at inception and there is no refund for unearned premium if the structure is completed in less than 12 months.
  • If you are in a flood zone, you must submit a "post construction elevation certificate" to your agent after construction is complete. The same surveyor should be able to provide this after completion. This will be required in order to renew the policy after the first year.
  • A flood policy on a home under construction does not include coverage for contents. Once the home is completed, you must notify your agent to endorse the policy to cover your contents after you move in.

Compliments of: Hammons Insurance Agency