OT - Home Insurance Question

[knightfan7]

After a long period of uncertainty it now appears I'll have the money to raise my home above the new flood standard. I may start as early as 4/1. Of course this means I'll be out of my home for the 2nd time since Sandy. The last time was almost 7 months.

My insurance agent had previously told me I need some kind of construction insurance apart from the insurance all contractors need to carry because I will not be residing in the home while the construction is going on. From what I'm told it's very expensive, almost 3x more than your typical homeowners insurance.

Anyone have any experience with this kind of thing?

 

[Knight Shift]

I have not, but I find it always worthwhile to talk to a couple of INDEPENDENT insurance agents. I have worked a lot with Harry Lutz over the years, and I have always found him able to find me cost effective insurance. He is located in Spring Lake Heights.
(732) 974-1991

 

[newell138]

Just a gut feeling but that doesnt sound right to me. What is the purpose of this insurance, considering you or no one else will be in the home? There have been 4 houses on my block that have been raised and honestly no one mentioned anything about that when I asked about costs. Since we only had water in my crawlspace during Sandy I opted not to raise mine. Mind if I ask you what you estimate overall expenses to be? Most of what I have heard was a minimum of 100K from start to finish.

 

[Knight Shift]

Just a gut feeling but that doesnt sound right to me. What is the purpose of this insurance, considering you or no one else will be in the home? There have been 4 houses on my block that have been raised and honestly no one mentioned anything about that when I asked about costs. Since we only had water in my crawlspace during Sandy I opted not to raise mine. Mind if I ask you what you estimate overall expenses to be? Most of what I have heard was a minimum of 100K from start to finish.

Someone in my family is doing this near Seaside Park, and it is costing about $150K.

 

[knightfan7]

Just a gut feeling but that doesnt sound right to me. What is the purpose of this insurance, considering you or no one else will be in the home? There have been 4 houses on my block that have been raised and honestly no one mentioned anything about that when I asked about costs. Since we only had water in my crawlspace during Sandy I opted not to raise mine. Mind if I ask you what you estimate overall expenses to be? Most of what I have heard was a minimum of 100K from start to finish.

Mine is kind unique so it's different than many.

Someone in my family is doing this near Seaside Park, and it is costing about $150K.

Mine will be a bit more but my floorplan is causing that. I have to go up 6' and rebuild part of the 1st floor.

 

[RU85inFla]

Why would insurance during a renovation be much different than new construction when you are building. I have done both and have not run into what you are talking about. But then again they weren't raising the house.

 

[knightfan7]

I understand it's something to do with the fact the house is uninhabitable during construction but my confusion is why I brought it up here. There are very few subjects where there isn't an expert on the board.

 

[RUBubba]

It sounds to me like the agent is talking about a Builders Risk policy. This is a policy that covers the home during the course of construction or extensive renovation/reconstruction.
Cost varies depending on extent of work being done, existing structure, costs, etc.

The contractors insurance policy does not cover your home unless its their fault something goes wrong. Suppose they do $100,000 of work, then lightning hits the home causing a fire. Is the builder going to redo the work out of the kindness of their heart? No. They want to paid again for the work. Do you want to pay them again out of your own pocket? No, you do not.

 

[lilphilw]

I work in PA but if I'm understanding it right, you will need vacant home insurance. If your home is empty without furnishing, it is considered vacant. This insurance will typically be double to triple your premium because they believe the risk of your home having a loss goes up.

If there is furnishing in your home and you visit once in a while, you would have to get a policy stating your home is under construction/ renovation but won't be deemed vacant. This insurance is also expensive but not typically anywhere near as expensive

If you're demoing your home and starting from scratch, you would need a builder's risk policy.

 

[ClassOf02]

It sounds to me like the agent is talking about a Builders Risk policy. This is a policy that covers the home during the course of construction or extensive renovation/reconstruction.
Cost varies depending on extent of work being done, existing structure, costs, etc.

The contractors insurance policy does not cover your home unless its their fault something goes wrong. Suppose they do $100,000 of work, then lightning hits the home causing a fire. Is the builder going to redo the work out of the kindness of their heart? No. They want to paid again for the work. Do you want to pay them again out of your own pocket? No, you do not.

Bubba has this one right. Raising the house would most certainly qualify as extensive renovation/reconstruction. You need property coverage for anything that might happen NOT due to the contractor's work and/or negligence.

 

[knightfan7]

I work in PA but if I'm understanding it right, you will need vacant home insurance. If your home is empty without furnishing, it is considered vacant. This insurance will typically be double to triple your premium because they believe the risk of your home having a loss goes up.

If there is furnishing in your home and you visit once in a while, you would have to get a policy stating your home is under construction/ renovation but won't be deemed vacant. This insurance is also expensive but not typically anywhere near as expensive

If you're demoing your home and starting from scratch, you would need a builder's risk policy.

It's a combo. They're demo'ing part of the foundation, rebuilding it higher and rebuilding a bedroom, family room, and bath. The garage, other 6 rooms, and 2nd bath will remain untouched other than being 6' higher. If I get the Apt (studio) I'm looking at 90% of furnishing would stay in the home. I'd be taking the furnishings in the family room and a kitchen table.

 

[knightfan7]

Thanks for the responses guys. It helps a lot.

 

[koleszar]

Thanks for the responses guys. It helps a lot.

Just remember to make sure your contractors have at least 1 mil. in liability and carry workers comp. I tell my customers all the time we have a 2.5 mil. liability policy(we do some big jobs) and have workers comp for all my employees. If they go with someone without workers comp and a worker gets hurt that guy could potentially end up owning their home. Make sure you get a certificate with your address as additionally insured most guys will lie.

 

[RUSK97]

Mine is kind unique so it's different than many.



Mine will be a bit more but my floorplan is causing that. I have to go up 6' and rebuild part of the 1st floor.

Is 6' raise enough? Doesn't seem like much. I was thinking 8-10' raise.

 

[koleszar]

Is 6' raise enough? Doesn't seem like much. I was thinking 8-10' raise.

We did quite a few house raisings in Monmouth/Ocean county and 6' was a pretty standard raise height. Don't forget most homes can only go so high in these areas as they have height restrictions in place as well with power lines and such.

 

[knightfan7]

Is 6' raise enough? Doesn't seem like much. I was thinking 8-10' raise.

6' will put me at 12'. I'm in an AE zone, 9ft, so that will put my lowest floor 3 feet above the requirement.

 

[knightfan7]

We did quite a few house raisings in Monmouth/Ocean county and 6' was a pretty standard raise height. Don't forget most homes can only go so high in these areas as they have height restrictions in place as well with power lines and such.

Yup, that is an issue and why you'll see some funky roofs. I'll be well within the height restrictions.

 

[DanoRU]

I agree with others who say it's a Builders Risk Policy. It also covers theft from the site and liability for anyone injured. We knocked down our house and got the policy for the re-build. $2,600 for the 1 year policy that included their inspection and brokers fees. It's much more than what I expected but what can you do. edit.... forgot to mention the policy has to be in place prior to the start of construction.

 

[lilphilw]

Builders risk policies are typically homes that are being built from scratch. If part of the home is already built a lot of companies won't give you a builders risk policy. They want to be there from the very start of a home being built. At least in pa, not sure what the rules are in nj. In my opinion it would need to be a vacant home policy with an under renovation endorsement. It's gonna be expensive.

Also agree with the person saying to make sure your contractors have at least 1 million liability and workers comp

 

[ruvsi]

Builders risk policies are typically homes that are being built from scratch. If part of the home is already built a lot of companies won't give you a builders risk policy. They want to be there from the very start of a home being built. At least in pa, not sure what the rules are in nj. In my opinion it would need to be a vacant home policy with an under renovation endorsement. It's gonna be expensive.

Also agree with the person saying to make sure your contractors have at least 1 million liability and workers comp

It is a Builders Risk policy. Since you are on the coast or close to the water only Surplus Plus lines insurance companies will write this. Lloyds of London or Lexington come to mind. Have all sub contractors carry General Liability and Workers Comp coverage. Have the name you as additional insured on the certificate of insurance. Let me know if you need assistance we write these all the time.