Dodge These Residential Builder’s Risk Claims
In both the residential and commercial space, construction is still booming. Not only are there new construction projects, but there’s a lot of remodeling going on today. The underlying construction market remains strong, and that is perhaps why we are seeing a spark of residential building projects creep up. But to help you when you’re working on residential construction projects, take a look at these builder’s risk claim issues to avoid.
- Get the correct address for the new construction project on the insurance policy
When you’re building a single-family home in a new neighborhood, determining the correct address can sometimes be delayed until a formal street name is established. If the legal address is not yet available, ensure the subdivision name and lot number are correctly listed on the insurance policy. If the worst should happen and you need to file a builder’s risk claim, the insurer may reject the claim if the address cannot be identified.
- Understand the importance of reporting
Reporting form policies are designed for builders with multiple projects in a 12-month period. However, these policies require a diligent contractor who submits regular, accurate reports according to the established period. In the event of damage, a contractor who hasn’t submitted their reports promptly could learn that the carrier has denied coverage for never reporting or pay out a reduced claim payment for missing reports.
- Understand exclusions
It’s common for builders to secure a builder’s risk policy and then not give it a second thought throughout the process. It’s important to understand what is and is not covered by your policy. Standard builder’s risk policies don’t include coverage for flood, earthquake, equipment breakdown, or testing of HVAC systems. If you believe you’ll need coverage for these instances, a separate rider can be purchased. Be sure to look over your policy before starting construction.