Building your own house can be one of the greatest things you ever achieve. Knowing that every board, every wall and every support beam was put in place by you and your team creates a sense of pride that few things in this life offer.
Yet, new home construction can also be confusing when it comes to home insurance. Here's what you need to know:
- Get your home insured while it's still under construction. You only need the basics for now: dwelling and fire insurance, and liability if anyone's going to be visiting. A lot can go wrong before the home is completed, so you want to be covered.
- If you're hiring contractors, make sure they're carrying their own insurance. Just about any professional contractor worth dealing with will carry their own insurance for themselves and all their team members. Beyond the practical need for insurance, a contractor without their own insurance is a red flag.
- Check on coverage for all employees. If you plan on hiring friends and family to help you out on the two-man jobs, chances are your general liability protection will cover them. But you will want to talk to your insurer before hiring anyone so that you can make sure you buy adequate coverage.
- Update your insurance policy as you go. As each room is completed and fixtures are added, your unfinished home will increase dramatically in value on an almost-daily basis. Your home insurance provider cannot give you adequate protection if they don't know what they're protecting.
- Keep security in mind. Safety comes first on any job site, but security is a close second. If someone steals from your job site because you left an expensive set of power tools lying around after-hours, there's a good chance that your insurer will chalk that up to negligence on your part.
- Consider additional coverage options. Since you are both the homeowner and the builder, you will probably want to look into builder's insurance to make sure that you are covered on both fronts.
One final note: Building a home is a big deal. It's not a project that you should try to tackle on your own if you do not already have considerable construction experience. If building your own home is important to you, join a crew as a gofer, take some courses, learn the ropes and get certified. Then, go ahead and build your dream home.