Residential Construction Insurance
Definition - What does Residential Construction Insurance mean?
Residential construction insurance refers to coverage for a house that is still being built or is in the process of completion. The policyholder might be the property owner, the contractor, or both. It covers damage to the uncompleted structure.
Insuranceopedia explains Residential Construction Insurance
The insurance market advises getting a homeowners policy even if the construction of a house has not even begun. This is to anticipate the risks during the building of the house—such as weather damage, theft, and vandalism—that affect not only the structure itself but also the building materials.
The property owner must also check the insurance coverage of the builder and their staff. If they are not properly insured, the property owner must get a builder's risk policy. This policy covers the tools and materials that are going to be used for construction, even if they are damaged outside the premises of the property.
One policy that a contractor must have is a liability policy that pays for mistakes in the construction, even if those mistakes are identified only after the building is complete.
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