Site insurance?

[Erin]

Forgive me.  Lawyer's kid, I tend to think in worst-case scenarios. 

How hard is it to get job site insurance for the DIYer?  I mean, if we had a fire and the half-constructed house went up in flames, what kind of insurance is there to cover it?

How many of you who've already built had insurance?

[MountainDon]

Good question, Erin.


Answer:   


I never had any special insurance on anything I've built for myself so far. But I did tell the agent after the fact.

[MikeT]

For what it's worth:  I looked into this and came up empty.  I didn't personally search hard, but I asked our insurance broker (who presumably would have an interest in selling us something if he could), but he came up empty for DIYers.  If I were using a bonded contractor, then the issue seems different.

I am basically trying not to think too much about disasters and looking toward getting my Certificate of Occupancy as soon as humanly possible so I can get homeowners insurance.

mt

[Redoverfarm]

I am getting ready to insure the cabin since I have more investment than the basic start up.  I am sure that there is some type of policy available although it may not be listed as such.  Probably an add on to the HO policy. I had once heard there was a construction policy for fire, liabilty that was available. As I stated before I am in the process so I will be finding out one way or the other shortly.  But you can probably bet that with the majority of the smaller cabins that the prem's for 24 minths would probably be more than the cabin cost. Insurance in my opinion is a rip off but a necessary evil.

We have a estate policy with a Farmers Insurance. Since it is a farm no problem. But there are several houses(not farms) that were insured by the same company that wer dropped because of the mileage from an acredited fire department. Shoot this is WV a rural area and probably 75-80% of the fire departments are volunteer and not within any close proximity of the rural population. 

[n74tg]

On my project I only asked two insurers; one (USAA) said they were not interested because I expected it to take more than a year to complete it.  I can't remember if I told them it was a DIY project.  The other insurer said they had just had a change in company policy to allow builders risk policies to run up to two year duration (up from one year previously).  The insurance agent is a friend of mine, and he didn't balk at the project being a DIY.  I can't remember the name of the company he would write the policy with.

Now, that being said, he did require that the policy be written before I started building with "wood"; ie my concrete footers and concrete block foundation walls already being built wouldn't exclude me.  However, since I have started the wood phase of construction, I didn't  inquire further.  So, I guess I'm in the same boat as MountainDon; ie self-insuring the project until it's occupied.

[Jackson Landers]

I am an insurance broker so I can explain the situation pretty well.

Few, if any, insurers are going to be interested in insuring a 'course of construction' by a builder who has no professional credentials. I'm sure that there is some surplus lines company out there somewhere that is willing to do it.  But only a very savvy and well-connected independent agent is likely to know where to look.

However, the houses that most of us here are building are small enough and of such relatively low value that the premiums would be so low that it wouldn't be worth an agent's time to find that program and do the work to get that insurance. If the premium is going to be $1,000, the agent is probably making $100 at best and since it's an oddball case he will have to spend hours shopping it around.  Add in the time involved in issuing the policy and dealing with the invoice and literally he would probably lose money on the deal.

If you are going to try to get insurance on the course of construction, do so BEFORE you start.  Nobody wants to start insuring a CoC starting mid-way through the project.  Even if it's being built by a professional GC. I won't bore you with the reasons for that.

Probably you are going to have to self-insure until the project is done and you can get a homeowners policy.  Meanwhile, manage the risk the same way that an insurance company would through their requirements:

- Have a fire extinguisher on hand on each level of the building.  Battery operated smoke detectors wouldn't be a bad idea.

- Install (and use) locks on the doors as soon as you are dried in to prevent theft of tools or materials.

- Secure expensive items such as heat pumps, hot water heaters and appliances to the framing with locked bicycle chains to deter theft before the building is dried in. 

- Since you have no liability coverage, be absolutely certain that if you do use subcontractors for any stage of construction, make sure that at a minimum they have workers compensation coverage for their own employees. It's when other people start showing up around the building site that your potential for liability trouble really increases.  If an electrician's assistant falls off the rickety ladder that you had leaned up before the stairs went in, then you want his workers comp to kick in and pay his ER bills. Otherwise you are the one who is going to be on the hook for it, since it's your building site. 

- Maintain a clean site with no heaps of flammable sawdust or oily rags sitting around.

[MountainDon]

Thanks for the clearly outlined information.

[Chuckca]

I'm a photographer by trade.  Many photography venues have specific coverage requirements.  I use to carry one policy that covered everything.  Worked for most of the time.  Now, I purchase the coverages as I need them.  OK, with this being said.

I would think there's  a company or association out there that can and would provide $XX coverage for a stated peiod of time.   

[Jackson Landers]

Chuckca,

Unfortunately, there is no formal 'Owner-Builder Association of America.' If there was such an organization that had tens of thousands of members as a pool of likely customers, then they could go to an insurance company and ask them to set up a special program to provide coverage for their members' construction projects. Since you'd have a simple way of targeting enough clients to make it worthwhile, that MIGHT make the thing economically feasible.

It would probably be pretty hard to maintain a very large membership for such an organization, since most owner-builders build their house and then they are done and they cease to be builders.  They'd join for a year and never renew.

The special event policies that you are getting as a professional photographer cover a much smaller risk than a construction site being operated by someone who has no credentials or demonstrable experience in that field.  I say this as someone who has a nice little 190 sq ft. house going up out back right now.  I'm pretty darn pleased with how this building is turning out but I would never expect a major financial institution to bet hundreds of thousands of dollars in potential liability on my competence as a carpenter and construction manager.   

[glenn kangiser]

Thanks for posting and letting us benefit from your experience, Jackson.

[Mo]

We have Farm Bureau of North Carolina and our agent could cover us (if here in NC) by adding onto our Auto/Camper/Rental policy we have with them. He phoned the West Virginia FB in our town there and they went out to the house, they would only cover us if we would guarantee that I would be finished within 2 years. Heck I am on a 7 year plan now and I cannot even guarantee that. Farm Buruea did state that any tools and such we have there is personal property and would be covered under our rental policy here if we need it. Then they offer us a building Mortgage as a self builder, I didn't look into it though.

[Redoverfarm]

Mo  not to seem nosy but where in WV is your house. I live there as well. But full time as well as building a cabin not far fromt he house.

[Mo]

Well it really isn't nosey since I know pretty much exactly where your cabin is  . We lived in Arbovale for 2 years before we moved down here about 10 years ago. Husbands family is there.
My cabin is in Barbour County between Elkins and Buckhannon, about 2 miles from Audra State Park. Take 92 to Belington and make a left. Its really a little bitty world out there or maybe it here.

[Redoverfarm]

Small world afterall isn't it. I have been here since 1989. Married a local girl from Marlinton. Worked that area before I retired. Shoot I probably know who you knew.  Are you like alot of the others and left because of better employment.  If you don't log, farm, work for the FS  or have something to do with Snowshoe there is not much here to keep you close to home. Nice to hear from you. Ever get back to this area?

I know where Audra is at.  Been there a few times. The superintendent over the park was once a game warden here. Don't know if he still is there or not. There was a lot of cabins in that area.  I knew some people that used to live there years ago.  Went diving in the winter once(buisness). Wasn't enjoyable popping up through the ice. Is that the Tygart River?

[pioneergal]

Forgive me.  Lawyer's kid, I tend to think in worst-case scenarios. 

How hard is it to get job site insurance for the DIYer?  I mean, if we had a fire and the half-constructed house went up in flames, what kind of insurance is there to cover it?

How many of you who've already built had insurance?

Erin,

We made the mistake of starting our build before getting insurance but it all worked okay after answering a few questions and some pictures of the house. We went to GERMANIA INSURANCE here in Texas and got a  "builders risk" policy. You might check to see if Germania or another company offers a builders risk policy in your area.

[Mo]

  Sorry about the highjack, I emailed you Redoverfarm.

[Erin]

Ah!
There might be hope afterall...  That's what I'll have to look for then. 

[MountainDon]

Looks like they only do Texans.

http://www.germania-ins.com/countyagents/agentsearch.shtml

[Redoverfarm]

MO check you PM box.

[MountainDon]

Moderator Note:
Topic Split: posts referring to specific Post & Beam Insurance question split off to...

http://countryplans.com/smf/index.php?topic=4306.0

[OldDog]

I have a home owners policy in effect on site already.  I did add a construction policy that covers the new cabin, liability, fire, theft etc  for $185 per year.

Took in a copy of the plans and my check book, no problem.

This was thru Ky Farm Bureau.

Bruce

[Redoverfarm]

Yesterday I talked to a State Farm agent who said there would be no problem with them insuring a cabin under construction.  Advised it would be a home owners policy.  Theift would not kick in until it could be locked.  There was a time limit on completion but as I explained that most were "weekend warriors" he stated the agent should take that into consideration and additional time would be allotted. He suggested that you should take photographs & plans when inquiring. 

[Erin]

Just thought I'd add to my old thread. 

In addition to those who've already mentioned such a thing, we just got "Builder's Risk" insurance.  It's in effect as of today.   

Ours is through State Farm and will become our homeowner's insurance.  She said they insure for a year as "builder's risk" but also said that can be, and is, extended with no problems.  (In fact, my agent and her husband are also DIYers who built their concrete home a few years ago and did almost all of the work themselves.)