You probably know that a homeowner's policy is essential. But you
might also
own other types of property with special coverage needs. If you are in the
process of building a new home, or if you own a rental property, you should
think about safeguarding your investment.
Building a Home
Property owners can
face significant financial losses if a new home is
damaged or destroyed before it is completed. One way to protect an
unfinished home is to purchase a standard homeowner's policy that covers
damage to the structure, theft of building materials, and liability - for
injuries to people visiting or even trespassing on your property. Any
contractors should have their own insurance for their workers. You would
need to reevaluate the policy once the home was completed to make sure you
have adequate coverage amounts.
A "dwelling and fire" policy is
another option. These policies cover damage
to the physical structure and some liability, but don't provide coverage for
theft. If you still live in your previous home, the homeowner's policy you
already have may provide coverage for theft at the construction site. Some
companies offer specific "builder's risk" policies that cover both the
structure and theft on the building site, but not liability. However,
liability coverage under a current homeowner's or renter's policy can often
be extended to cover the construction site.
Rental Property
Rental
property owners also have a unique situation to consider. In many
cases they will want to cover their property for damage and have plenty of
liability protection. Unless the property is rented out with furnishings,
theft insurance is probably not necessary. Some companies will provide basic
hazard or "fire" insurance that does not cover theft. You may be able to add
endorsements to your own homeowner's policy that extend liability coverage
to rental properties. Other companies offer specific "landlords" packages
that are designed for one- to four-family rental property. Some mortgage
lenders require insurance for rentals that includes a "rent-loss" provision.
If a rental is damaged and unlivable, the insurer reimburses the owner for
rent that is lost while repairs are being made to the
property.
Variations in the names and details of these policies can
make it confusing
and difficult to compare policies against each other. When shopping for a
policy, it's a good idea to carefully consider the specific kinds of
coverage you need - in conjunction with what you already have for your own
residence.
© 2003 Emerald Publications
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