Builders Risk/Cost of Construction Insurance
When you are planning to build that new custom home or looking to do a major remodeling project that includes adding additional square feet to your current home, there is an enormous amount of planning that goes into those projects, from drawings to permits to finding the right, properly insured Phoenix, AZ contractor to handle the project. In addition to these items, one more important piece of planning should be to acquire an Arizona Builder’s Risk Insurance Policy, which is also known as Cost of Construction Insurance.
Builder’s Risk Insurance/Cost of Construction insurance is a unique type of property insurance coverage which guards against damage to structures while they are under construction. By obtaining an Arizona Builder’s Risk Insurance Policy, you are protecting an organization’s or an individual’s insurable interest in the structure, fixtures, and/or equipment, and materials that may be used in the construction or renovation of a structure or a building in the event that they suffer a physical loss or damage from one of the covered causes of loss contained in the policy. If you are building a new custom home or doing a remodel/room addition, most times your homeowner’s insurance policy will not cover a loss should an accident happen while you are building or remodeling your home. That is why it is very important that you secure this type of insurance coverage before you start the project.
There is nothing worse than finding out there is no coverage after a serious fire, theft, vandalism, or some other development that could cost you thousands of dollars out of your pocket. Before the project starts, make sure that either the owner or contractor obtains an Arizona Builder’s Risk Insurance Policy as well as their Scottsdale Commercial General Liability Insurance so there are no surprises.
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It should be noted that a builder’s risk/course of construction insurance policy will have a maximum payout of the coverage limit which is stated in the policy. When you are determining exactly what value limit you will need on your Arizona Builder’s Risk Insurance Policy, you must take into account a limit that will be as close to the completed value of the project, which should include all overhead, labor and material costs, but not the cost of the land. Remember, also consider the worst case scenario: what would it take if you had to start over completely? These types of policies can be written on a three month, six month, or twelve month cycle. If your particular project is set to complete after the twelve month cycle, often times it can be extended, but in most cases, only once.
PJO Insurance Brokerage has many markets to choose from, and we can help guide you through the process, detailing coverages of what can be covered and what cannot be covered through your Arizona Builder’s Risk Insurance Policy. We can also look for any additional specialized coverages your project may need. We would welcome the opportunity to work with you on your next new home, commercial building, or renovation. To receive a quote, please call the professionals at PJO Insurance Brokerage.