- Most insurance companies will not write a building or home that is under construction. In fact, most have an underwriting question that specifically asks, is or will the property be under construction. If yes, it might be an ineligible risk.
- Vacant property. Insurance companies do not like vacant properties due to the theft and vandalism exposure. If the property is going to be vacant for an extended period of time, the insurance company might not write it.
If you have a property described above, it's extremely important you contact your insurance agent to see if they will write it. If they won't write it, you will need to get a Builders Risk policy. Here's some information that will be helpful for you when choosing a Builders Risk Insurance Policy:
- Verify the property coverage amount before construction and after construction. Is it Replacements Cost or Actual Cash Value?
- Theft coverage
- Property in transit
- Property at a temporary storage
How much does a Builders Risk Insurance Policy cost? Obviously costs vary by the size of the property. I have heard a good rule of thumb is 1-3% of the construction budget should be allocated towards the policy.
Most Builders Risk companies will need to know contractor information and experience, so make sure you choose an experienced builder for your project. If you have any questions about a Builders Risk Insurance policy or another Business Insurance policy, please feel free to contact me. It's an exciting time in Austin, Texas seeing all the growth and cool companies sprout up. I would be happy to meet with you and learn more about your business to see if I can help with your insurance.