What’s the difference between various property insurance types?
Updated: Feb 14
What’s the difference between builder’s risk, course of construction, vacant home and homeowners insurance?
Builder's risk insurance is coverage that protects a person's or organizations insurable interest in materials, fixtures and equipment being used in the construction or renovation of a building or structure should those items sustain physical loss or damage from a covered cause. It is important to carry builder’s risk insurance on any construction or renovation project.
Course of Construction: Course of construction is similar to builder’s risk in what it covers, however it is more commonly used on construction projects where the build is from the ground up to the roof, not just a renovation.
Vacant Home with Renovation Endorsement: Vacant home insurance is used to cover your investment property or home while it is unoccupied during a non-structural fix and flip. This protects you against accidents or named perils, such as fire, lightning, and hail. Check out this quick guide to vacant home insurance for more details. A standard homeowner’s or landlord policy often will not provide you with the correct coverage you need for a fix and flip.
Homeowners Insurance: Homeowners insurance is a package policy. It covers both damage and losses to your property and your liability or legal responsibility for any injuries and property damage you or members of your family cause to other people. It also covers theft of your personal belongings up to your limit. Because nearly everyone will need homeowners insurance at some point, finding ways to save money on your homeowners policy is definitely a priority. Flood insurance (from natural disasters) is never included in a homeowner’s policy and is actually a separate policy you can acquire.
Landlord (Rental Property) Insurance: Landlord insurance is needed anytime someone who is not an owner is the sole occupant of a home. This policy is very similar to what is covered in a homeowners policy except there is no coverage for burglary or theft of any personal property. Also, the liability coverage is only for the premises versus a homeowners or renters liability coverage that will travel with you anywhere in the world. For more details read this quick guide to landlord insurance.
It’s important to know the difference between various types of property insurance policies so that you’re covered in the way that suits your needs best.
If you have any questions or would like some expert advice on the matter, contact your agent.
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