How to Insure Your Custom-built Home From Day One 

Building a custom home in Colorado introduces specific risks that require careful planning, particularly when it comes to insurance. Home Loan Insurance is here to assist you in securing coverage that can help you avoid costly setbacks and keep your project moving forward.

Understanding Insurance for New Construction

Insuring a custom-built home differs from insuring an existing property. During construction, the structure is exposed to risks such as fire, theft, vandalism and severe weather damage. Standard homeowners insurance typically becomes active only after the home is completed and ready for occupancy. This is why construction insurance is a crucial component of the building process.

Essential Coverage for Custom Homes

Home Loan Insurance recommends the following insurance options for anyone planning to build a home:

• Builders risk insurance—This policy is created for homes that are still under construction. It may cover damage to the structure, on-site building materials and certain equipment. Coverage typically remains in place until the project is complete and you move into the home.
• General liability insurance—If you are acting as your own builder or hiring contractors, liability coverage can help reduce the financial impact of claims related to other parties’ injuries or property damage during construction.
• Homeowners insurance—Once your home reaches completion, you will need homeowners insurance. This type of policy can apply to the finished structure, your personal belongings and liability coverage needs once you occupy the home.

Steps to Insure Your Custom Home From Day One

Consider these strategies for setting up coverage:

• Consult early—Connect with our team before construction begins so we can help you identify suitable policies and coverage limits for your project.
• Review builder and contractor insurance—Confirm that your builder or contractors carry their own insurance and request proof of coverage for your records.
• Transition coverage—As your home approaches completion, we can guide you through the process of shifting from builder’s risk coverage to a standard homeowners policy.

Secure a Policy Today

Our team at Home Loan Insurance is knowledgeable about Colorado home insurance and the risks associated with building in the state. Contact us today to secure coverage for your upcoming build.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.