Being an owner builder may be quite frustrating but also quite rewarding in terms of satisfaction and money saved once the work is done. Owner builder insurance is very beneficial especially to the owner of the project. These benefits do not come with regular commercial or homeowner’s property insurance. Various owner builder insurance providers offer varying products and it is important not to get lost in the different coverage and protection. This can only be achieved by finding out the exact product you need.
Whether it is a legal necessity or not, owner builder insurance is quite vital and highly recommended for anyone with a new construction project, renovation, or reconstruction where they build their own home. Being fully insured from the initial is the key to success for any self built project. However, even as you strive to add a personal touch to your home, it is critical that you ensure that you get the correct insurance coverage.
How it works
The Owner builder insurance policy protects subsequent owners from defective work on the home in case the owner builder dies, disappears or becomes insolvent. To eliminate any difficulties in insuring the project, the insurance cover should be obtained before any work commences. Though standard policies usually run for twelve months, extensions are usually available just in case the project takes longer. If you sell the property within 6 months of completion of the project, you need to provide the new owner with the Owner builder insurance warranty.
This element is critical since once you enter into a contract of sale without insurance, it can be voided by the buyer at any time before the contract is fully completed. Therefore, it is in the best interest of the owner builder to seek the right advice.
Construction work and liability insurance
This protects you against various risks that may be encountered in the construction phase of the project. Damage from human and natural induced hazards, problems in workmanship, water, and fire are all covered. However, in some cases, some natural hazards such as earthquakes and tornados may not be covered in some regions. Ensure that you discuss this aspect with your insurance provider to ensure that every possible risk and hazard is covered.
Public liability insurance
Public liability insurance cover protects you from any liability when someone is injured near or at the construction site. This is a vital aspect in your package of owner builder insurance cover since even damages to property near or at the construction site is also covered.
Builders warranty insurance
This comes in handy especially for property owners who are planning to sell the property within six months after completion of the project. This is primarily because it will provide coverage to the buyer of the property. This is usually a legal requirement and it is vital not to ignore it.
Personal accident insurance cover
Construction sites are among the most dangerous places to work. Since many owner builders prefer to be present and even help at the site, this provides coverage in case you are injured at the site. This is a real life saver especially when the home owner builder cannot attend their day job due to injury.
Due to the risks associated with most construction projects, it is important to be covered for different risks. However, different construction projects face different risks and it is vital that you compare various quotes from different insurance providers and settle for the one that suits you best.