If you own a piece of property, you need to cover it with insurance. That is true for everyone, no matter who you are or what you own. This is where the similarities end, though. Some property owners need homeowners insurance, while others are better served with builder’s risk insurance. Why? What’s the difference? Let’s look at a builder’s risk policy vs homeowners insurance right now to understand the difference, as well as which one is the right choice for your situation.
Table of Contents
What is Homeowners Insurance?
What is Builder’s Risk Insurance?
Builder’s Risk Policy vs Homeowners Insurance
Insurance Options From Pronto Insurance
What is Homeowners Insurance?
Plain and simple, you cannot and should not own a home without covering it with homeowners insurance. The typical policy insures your home’s structure (the house itself) plus your fence, shed, pool, yard, and belongings in case of a disastrous event. This could be anything from a thief breaking in to steal your television to a catastrophic house fire.
Homeowner’s insurance also covers the homeowner’s liability, and legal responsibility, for any injuries and property damage to others caused by you, members of the family, and household pets.
What is Builder’s Risk Insurance?
A builder’s risk insurance commercial policy is the backbone of a successful risk management program. This policy protects property and construction materials during a construction or renovation project. It is a commercial insurance type that covers the property on construction sites when it’s damaged or destroyed by fire, wind, vehicle collisions, vandalism, or other accidents.
All builder’s risk insurance policies will cover the building that’s being constructed or renovated. It usually also covers materials that you store off-site that are damaged or lost in transit to the construction site. If you want the most coverage possible, some builders’ risk insurance policies also cover items like construction materials stored off-site, cleanup costs, and debris removal.
Builder’s Risk Policy vs Homeowners Insurance
Actually, the difference is pretty simple. A builder’s risk policy is for the business in charge of the construction of the home. It covers events until the home is finished and handed off to the true owners of the house, the homeowners. Once the construction project is finished and the homeowners move in or at least officially own it, the house is covered by residential homeowners’ insurance. One covers a business and one covers the people who live in the house, but each covers the house itself from damage, theft, and severe weather, only at different times.
Insurance Options From Pronto Insurance
As you may already know, buying a home isn’t an easy process. There are multiple factors to consider when purchasing a house.
If someone purchases a vacant lot and builds a home on it, homeowners’ coverage will not protect the home during the course of construction. During this stage of construction, it is covered by a builder’s risk insurance. Once the house is finished, the owner’s homeowners insurance takes over protection. This is the main difference between a builder’s risk policy vs homeowners insurance. You can get both of these policies, and many others, through Pronto Insurance!
