Tragic Reminder Get Insured.........

rick91351 · July 16, 2013, 11:46:50 PM

With one member on the forum having a tragic loss of his build. Do to what was believed to be a lighting storm. Last year another member in Utah was sweating it as we monitored several wild fires in his area. Mountain Don has had a couple red flags as well. One was man caused and nature a couple times had us all concerned.

A good rule of thumb when you can no longer underwrite your own losses out of pocket then you need to insure. So if that is piers and a floor and then you look around and there is several thousand in other building materials on the ground and more coming but the bank account is still good and you are comfortable. OK. Then the walls are up and your looking around and windows are going in and your bank account is starting to show it and you know you cant just replace it out of pocket. The short of it is you have to know when to insure. Talk to your agent, and or shop around.

Even a bare ground here / raw ground other places cabin lot may open you up to some exposure. Before our current agent we were told by our attorney, our insurance agent, and even the accountant we needed to insure for liability on the ranch that was bare ground at the time. We had to much exposure there it was felt. Problem we occurred we could not find a underwriter that would take it on. This went on for about a year. I even posted here asking others. After we changed agents or our old company changed agents for us. I called an old friend and pleaded our case and he did find a company that did underwrite us very reasonably. We joined his group and have been there ever since.

Side note my agent has told me as soon as I turned a shove full of dirt on my building permit he has to know and put another policy in place. He has been very adamant about that and has called me a couple times to remind me. (We were good friends before he became our insurance agent.)

Don_P · July 17, 2013, 08:41:44 AM

Quote(We were good friends before he became our insurance agent.)

Does that mean?... never mind

One other caveat that is all too often overlooked until one is committed to a path. Many building codes (read codified laws) are driven by the insurance industry in an effort to reduce losses of people and property. The other side of that coin is that even if a property is underwritten, in the event of a loss the insurance may not cover the loss if the building was constructed outside of the code's provisions. Many times I have been asked to do work that is outside of code and the building inspector has often been ok with or ignorant of the work. I have still refused as in my capacity as builder I'd be the next "insuror" in the event of a loss. My agent would consider it negligence and refuse the claim, there goes my house. For an owner builder that responsibility would fall on your shoulders. Do tread carefully.

July 17, 2013, 09:01:00 AM

Quote from: Don_P on July 17, 2013, 08:41:44 AM
Does that mean?... never mind

No we still manage to get together for coffee or a lunch - under the disguise of going over a rider or the whole policy thing. Usually never talk that but talk old friends and old places we once knew that were not so old back then.

What you are talking about the underwriters and code is one reason here they cleaned house on the county building department here. After several building failures and insurance companies pointing to them and wanting to know why they passed severed notice for a good house cleaning.

flyingvan · July 17, 2013, 09:11:07 AM

Here are some questions I asked my insurance agent---
What stages of the project will change my rates or make it insurable? ie fire sprinklers work, front door that locks (my case)
If a friend comes by to help and gets hurt, is he/she covered? (For my build the answer was NO, so wouldn't put anyone in the position to get hurt---that could end up worse than losing the structure to fire)
Are my tools covered?
If this is a replacement policy, how often and in what form do you want updates on progress?
What can I do in advance to lower rates? If I begin with creating road access, defensible space, and reliable water supply before I start instead of as a finishing detail, would it impact things?

After completion this made rolling the policy into a vacation home policy easier. My agent had taken an interest in the build a knew about all the fire resistive measures taken (most of which were required anyway)

For the record, I had no insurance until I had a way to lock all the doors on the place, so I would have suffered the same loss at that stage. My tools were not covered during the build, but curiously now that it's complete, they are.

bayview · July 17, 2013, 01:15:07 PM

For What It's Worth . . . In central Texas.

We were able to insure raw land . . . Property only for liability.

However we were "not" able to get insurance for outbuildings until we had a livable structure. Our detached garage and storage building were not insured until we built our cabin.

We sweated through a grass fire and tornado. Fortunately we didn't suffer any losses.

We did make sure any contractor/sub-contractor was self insured for losses/injuries before they stepped foot onto our property.

/.

July 17, 2013, 08:08:25 PM

Terrible tragedy, for sure.

I got a "builder's risk" policy for the cabin I'm building with another family. It supposedly handles losses while building. The only problem is it only was for one year and I'm not sure it can be renewed.

As for liability, we both are carrying large balloon policies for general liability.

rick91351 · July 17, 2013, 10:47:00 PM

From what I have seen so long as there is active building those types of policies can be renewed and will remain in effect until certificate of occupancy is granted. That said check with your agent.

JRR · July 17, 2013, 11:00:54 PM

I have formed the conviction that one should never fully pay off the mortgage on one's primary residence. When my mortgage balance gets low ... I borrow more money against the mortgage. Why? ... well, you will never get "cheaper" money for other investments .... and having the mortgage company as a "partner", on at least one property; keeps their expert eyes on things such as keeping proper insurance, response to changing property tax rules, tracking property market values, etc., etc.

Erin · July 19, 2013, 03:30:16 PM

I got a Builder's Risk with State Farm, also for one year. We're well beyond one year

so I asked my agent a while back if that means we aren't covered. He said it's called a homeowner's policy now, but he said really nothing has changed. If we were to have a fire, for example, we're completely covered no matter what stage we're actually at.

rick91351 · July 20, 2013, 09:08:32 AM

Our agent swapped us back to Farmers Alliance when we moved up here full time. Who ever he had us with at the time would not underwrite us up here living full time. I even tried AARP and they did not like the fact we had a ranch and ATVs that we actually rode, and there were cows and other critters up here. Looked like a great place to get insurance of you live in a rubber room and never could get hurt.