Many homeowners do not put much though into construction insurance in New Jersey. They reason correctly that the general contractor will take out the appropriate insurance. However, that insurance will favor the interests of the contractor; the homeowner may want additional protection. In addition, many lenders will specify the minimum requirements for construction insurance that the homeowner must purchase, in order to protect the lender’s collateral.
Construction Insurance Coverage
Policies will generally cover damage to materials and fixtures, as well as to equipment, for the contractors. It will also cover environmental hazards such as:
- Collision by vehicles or aircraft
Homeowners should start by examining the insurance taken out by their contractors.
Possible Insurance Exclusions
Homeowners should also be aware of exclusions in their contractor’s insurance, and be prepared to purchase additional coverage if necessary. Some common exclusions include:
- Wind damage in coastal areas
- Structure collapse
- Water / flood damage
- Employee Theft
- Governmental action
- Voluntary parting
- Mechanical breakdowns
- Contract penalties
Compile Your Requirements
Homeowners can take the policy of their contractor, list any additional risk assessments, and then consult with their local insurance provider. The agent will know the risks associated with the homeowner’s inclusions and exclusions He or she may suggest risk items that may not appear on the list, but are important in that homeowner’s locale. Together, the homeowner and agent can assemble a risk management plan, and arrange the proper construction insurance in New Jersey for the new home or renovation.