We are about to start a major remodeling project on our cottage.
The general contractor is asking us to obtain "Builder’s Risk Insurance".
Any advice is greatly appreciated.

- Do we really need this?
- Risks we take if we don't have it.
- Agencies to check

Thanks,

LikeQuoteFlag

"Who typically buys builder risk insurance?
Those with the greatest financial stake in the property should generally bear the expense of builder's risk insurance. Typically, this means the homeowner or the general contractor will be responsible for purchasing the coverage."

Tell him you'll split the cost. It appears to run 1% to 4% of the cost of the job.

Does he know an agent who sells it? (wink)

Is he planning on burning up the job materials or blowing them up or something?
He didn't figure his insurance cost into his bid?

Like +2QuoteFlag

Thanks for the reply. This was an unexpected expense for us, but we've never undertaken a project like this. We're moving the cottage and adding living space. It seems to cover the structure (which seems wise during the stormy season). It also covers theft and damage of building materials, and I'm not sure why he does not have coverage for that.

I'll be making some phone calls on Monday.

"Who typically buys builder risk insurance?
Those with the greatest financial stake in the property should generally bear the expense of builder's risk insurance. Typically, this means the homeowner or the general contractor will be responsible for purchasing the coverage."

Tell him you'll split the cost. It appears to run 1% to 4% of the cost of the job.

Does he know an agent who sells it? (wink)

Is he planning on burning up the job materials or blowing them up or something?
He didn't figure his insurance cost into his bid?

LikeQuoteFlag

I had an addition added to my house in 2001 and a large 6 figure addition added last year to my current house and I never even heard of Builder insurance. Let the builder pay that if "they" need it.

Like +2QuoteFlag

I would love to hear Tim's take on this. He's our Real Estate expert here. My instinct is that the contractor would normally be insured for this. I think he's trying to shift some of his costs on to the homeowner.

Tim?

Edit: Tim and I were typing at the same time!

Like +2QuoteFlag

I would love to hear Tim's take on this. He's our Real Estate expert here. My instinct is that the contractor would normally be insured for this. I think he's trying to shift some of his costs on to the homeowner.

Tim?

Edit: Tim and I were typing at the same time!

I agree with you. Sounds like an expense the builder should be paying.

Like +2QuoteFlag

I would love to hear Tim's take on this. He's our Real Estate expert here. My instinct is that the contractor would normally be insured for this. I think he's trying to shift some of his costs on to the homeowner.

Tim?

Edit: Tim and I were typing at the same time!

I agree with you. Sounds like an expense the builder should be paying.

I thought things might be different on the OBX, but where I live the builder carries all risk insurance, from liability to theft. For that matter, contact their insurance carrier yourself and ask for a certificate of insurance and check the coverage to make sure it’s adequate for state law and the scope of your project.

Like +1QuoteFlag

I had an addition added to my house in 2001 and a large 6 figure addition added last year to my current house and I never even heard of Builder insurance. Let the builder pay that if "they" need it.

Thanks Tim,

That's really interesting. Our project it ready to roll. Plans are all set and now awaiting building permit.

I'm curious to know who your contractor was, if you would be willing to PM me.
We know each other and you have my email address. My former profile name was "gfury" but I lost the password and access to the account.

LikeQuoteFlag

I had an addition added to my house in 2001 and a large 6 figure addition added last year to my current house and I never even heard of Builder insurance. Let the builder pay that if "they" need it.

Thanks Tim,

That's really interesting. Our project it ready to roll. Plans are all set and now awaiting building permit.

I'm curious to know who your contractor was, if you would be willing to PM me.
We know each other and you have my email address. My former profile name was "gfury" but I lost the password and access to the account.

Get the COI from the builders carrier. If one of his employees or subcontractors dies their family will sue you until they own your house.

Like +2QuoteFlag

Get the COI from the builders carrier. If one of his employees or subcontractors dies their family will sue you until they own your house.

Thanks Squid, what's COI ?

LikeQuoteFlag

I had an addition added to my house in 2001 and a large 6 figure addition added last year to my current house and I never even heard of Builder insurance. Let the builder pay that if "they" need it.

Thanks Tim,

That's really interesting. Our project it ready to roll. Plans are all set and now awaiting building permit.

I'm curious to know who your contractor was, if you would be willing to PM me.
We know each other and you have my email address. My former profile name was "gfury" but I lost the password and access to the account.

Hey Greg, I did not recognize the new name. I would not recommend the contractor I used, he did ok with me but really messed up a neighbors job. He had a contract that covered most everything and we did have a lien waver attorney which might be required now to protect the buyer. Is this going to be at your house in Nags Head? What are you having done and by who. PM me if you want.

LikeQuoteFlag

Get the COI from the builders carrier. If one of his employees or subcontractors dies their family will sue you until they own your house.

Thanks Squid, what's COI ?

Certificate of Insurance. We don’t let a sub on a project without a current COI. It should come directly from your contractors insurance carrier. An old policy statement doesn’t guarantee the insurance is current. Insurance companies are used to sending these out.

Like +1QuoteFlag

I had an addition added to my house in 2001 and a large 6 figure addition added last year to my current house and I never even heard of Builder insurance. Let the builder pay that if "they" need it.

Thanks Tim,

That's really interesting. Our project it ready to roll. Plans are all set and now awaiting building permit.

I'm curious to know who your contractor was, if you would be willing to PM me.
We know each other and you have my email address. My former profile name was "gfury" but I lost the password and access to the account.

Hey Greg, I did not recognize the new name. I would not recommend the contractor I used, he did ok with me but really messed up a neighbors job. He had a contract that covered most everything and we did have a lien waver attorney which might be required now to protect the buyer. Is this going to be at your house in Nags Head? What are you having done and by who. PM me if you want.

Thanks Tim. Yes, the little cottage in Nags Head.
We're lifting it, adding fill to the lot, moving it east a bit, adding a new kitchen, another bathroom and another bedroom.
I'll PM you the contractor.

The town is making us re-do the septic, bring the electrical up to code, pave the driveway, and add a parking space. Lot's of added costs in addition to the new living space.

LikeQuoteFlag

We're lifting it, adding fill to the lot, moving it east a bit,

As others have suggested, call around, but your project is a tad different....you're physically MOVING a cottage....not a lotta folks have the requisite skill set/team/regulatory knowledge/equipment to successfully execute a project like this.

I suspect the biz you are talking with saves cost by shifting the financial responsibility to you, the customer...they are typically small family run companies, not uber corps.

LikeQuoteFlag

I had an addition added to my house in 2001 and a large 6 figure addition added last year to my current house and I never even heard of Builder insurance. Let the builder pay that if "they" need it.

Thanks Tim,

That's really interesting. Our project it ready to roll. Plans are all set and now awaiting building permit.

I'm curious to know who your contractor was, if you would be willing to PM me.
We know each other and you have my email address. My former profile name was "gfury" but I lost the password and access to the account.

Hey Greg, I did not recognize the new name. I would not recommend the contractor I used, he did ok with me but really messed up a neighbors job. He had a contract that covered most everything and we did have a lien waver attorney which might be required now to protect the buyer. Is this going to be at your house in Nags Head? What are you having done and by who. PM me if you want.

Thanks Tim. Yes, the little cottage in Nags Head.
We're lifting it, adding fill to the lot, moving it east a bit, adding a new kitchen, another bathroom and another bedroom.
I'll PM you the contractor.

The town is making us re-do the septic, bring the electrical up to code, pave the driveway, and add a parking space. Lot's of added costs in addition to the new living space.

How does the cost of the upgrades compare to tear down and start over?

LikeQuoteFlag

How does the cost of the upgrades compare to tear down and start over?

We could probably build a new home for what this project is costing.
However, it's hard to put 5 generations of family history under the wrecking ball

Like +4QuoteFlag

We are about to start a major remodeling project on our cottage.
The general contractor is asking us to obtain "Builder’s Risk Insurance".
Any advice is greatly appreciated.

- Do we really need this?
- Risks we take if we don't have it.
- Agencies to check

Thanks,

Have you signed the contract for the work? On the outerbanks the builder or general contractor usually carries the policy on the work we have had done and the assignment of who pays for it is in the contract. in 2 occasions the builder carried it fully prior to obtaining permit and in once case we split the coverage since it involved bulkhead replacement that would tie into our neighbors on each side of us and he did not want any liability outside of our property.

LikeQuoteFlag

We are about to start a major remodeling project on our cottage.
The general contractor is asking us to obtain "Builder’s Risk Insurance".
Any advice is greatly appreciated.

- Do we really need this?
- Risks we take if we don't have it.
- Agencies to check

Thanks,

Have you signed the contract for the work? On the outerbanks the builder or general contractor usually carries the policy on the work we have had done and the assignment of how pays for it is in the contract. in 2 occasions the builder carried it fully prior to obtaining permit and in once case we split the coverage since it involved bulkhead replacement that would tie into our neighbors on each side of us and he did not want any liability outside of our property.

The contract has not been signed yet. We've been planning this project for a year, and chose this guy based on his previous projects that we liked.

LikeQuoteFlag

How does the cost of the upgrades compare to tear down and start over?

We could probably build a new home for what this project is costing.
However, it's hard to put 5 generations of family history under the wrecking ball

Keep the existing house with the memories. You will NEVER get those back. Good for you and good luck! You'll be fine.

LikeQuoteFlag

I had an addition added to my house in 2001 and a large 6 figure addition added last year to my current house and I never even heard of Builder insurance. Let the builder pay that if "they" need it.

Yeah, this^. The problem is that THIS builder will definitely pass the cost on to you. This is why I do almost everything myself, otherwise I have spent a lot of time and effort to find contractors that I have a personal relationship with, trust and use exclusively. My guess is Tim has a big list of guys he knows and trusts implicitly working in real estate here for so many years. I wouldn't even THINK of starting a big project without taking the time to go through the process of investigating and vetting builders. If one of my guys ever brought up "builders risk insurance" I would assume he was joking and burst out laughing.

LikeQuoteFlag

I had an addition added to my house in 2001 and a large 6 figure addition added last year to my current house and I never even heard of Builder insurance. Let the builder pay that if "they" need it.

Yeah, this^. The problem is that THIS builder will definitely pass the cost on to you. This is why I do almost everything myself, otherwise I have spent a lot of time and effort to find contractors that I have a personal relationship with, trust and use exclusively. My guess is Tim has a big list of guys he knows and trusts implicitly working in real estate here for so many years. I wouldn't even THINK of starting a big project without taking the time to go through the process of investigating and vetting builders. If one of my guys ever brought up "builders risk insurance" I would assume he was joking and burst out laughing.

I'm pretty sure most states require minimum liability and worker's comp coverage for any licensed contractor. If you want to go a step further, you can require your contractor to provide lien releases prior to final payment to make sure you're not liable for any unpaid material/Labor invoices. You can also require your contractor to provide a performance bond in case they fail to complete the work in an approved contractual manor. Most small guys won't be able to carry a bond, but you can certainly weed out the Rif-Raf.

Like +4QuoteFlag

I had an addition added to my house in 2001 and a large 6 figure addition added last year to my current house and I never even heard of Builder insurance. Let the builder pay that if "they" need it.

Yeah, this^. The problem is that THIS builder will definitely pass the cost on to you. This is why I do almost everything myself, otherwise I have spent a lot of time and effort to find contractors that I have a personal relationship with, trust and use exclusively. My guess is Tim has a big list of guys he knows and trusts implicitly working in real estate here for so many years. I wouldn't even THINK of starting a big project without taking the time to go through the process of investigating and vetting builders. If one of my guys ever brought up "builders risk insurance" I would assume he was joking and burst out laughing.

I'm pretty sure most states require minimum liability and worker's comp coverage for any licensed contractor. If you want to go a step further, you can require your contractor to provide lien releases prior to final payment to make sure you're not liable for any unpaid material/Labor invoices. You can also require your contractor to provide a performance bond in case they fail to complete the work in an approved contractual manor. Most small guys won't be able to carry a bond, but you can certainly weed out the Rif-Raf.

Well, since Im usually on a Johnny potatoes budget I usually end up working WITH the contractor which usually means it gets done right. Not everyone has the time or desire to do that. If I had a multi million dollar investment property maybe I would do it differently, maybe not?

Like +1QuoteFlag