FRIDAY, MARCH 26, 2021
 In any insurance agreement (home, auto, commercial etc.) there is always a question of what costs you want your policy to pay, and which ones you want to cover yourself. Insurance exists to cover costs that someone cannot afford to pay themselves following a challenging event, and it’s up to the policyholder to know where that limit lies for them.
Given that your home is one of the most important assets you can ever insure, you naturally want to protect it in the face of any unexpected challenges. However, when it comes to DIY projects around the house, you might be surprised to find that some of your coverage needs might be lacking. Still, if you have a benefit known as builder’s risk insurance, you might have help available. Let’s take a closer look at whether this benefit is necessary for all DIY projects.
Understanding Builder’s Risk Insurance
Making home improvements is going to take time and cost money. Whether large- or small-scale, these changes will add value to the home, and sometimes will necessitate an increase in your homeowners insurance limits. However, while the work is in progress, you might need the added benefit of builder’s risk insurance. Your homeowners insurance by itself usually won’t cover construction in progress.
Builder’s risk policies are designed specifically for insuring construction projects, including their materials and equipment, against unexpected, unavoidable losses. Therefore, even in DIY construction scenarios, this coverage might prove necessary. For example, if a fire were to gut your bathroom remodel, then you’re probably going to face a financial setback. Builder’s risk coverage will ensure you get the necessary compensation to get the project back on track.
In many cases, builder’s risk insurance won’t be necessary if you are simply taking on a small project, such as building a doghouse or laying out a new garden. However, large-scale DIY projects, such as significant remodels or new home construction will often necessitate this benefit. These are far too important of investments to risk losing.
Additionally, there are times where even personal projects might have a builder’s risk insurance requirement. This need might arise when you:
If these transactions involve third parties—clients, lenders, landlords—then it is usually they who will institute the coverage requirements. However, if you are the sole party involved in the project, you have free reign to choose your benefits. Still, the importance of builder’s risk insurance cannot be understated, especially when you are taking on a massive project by yourself.
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