Course of Construction Insurance

What You Need To Know Before You Build Your Home.

Submitted by Eric Kossian of Leavenworth Insurance

We’ll assume you’ve purchased your dream lot and have hired a contractor. Prior to this point, you should have liability coverage either extending from another home policy or have a vacant lot liability policy. Once you start building you still need liability insurance (your vacant land liability policy is now void once construction starts) and you will need dwelling coverage while the dwelling is being built. Your contractors should have a Contractor’s Liability policies covering their work on the dwelling. For additional tips regarding your contractor see the bottom of the page.

Course of Construction Insurance

Contractor liability policies do NOT cover your liability as a land owner and they do NOT cover the building while being built. Both of these needs can be easily and inexpensively covered by you with a Course of Construction insurance policy. These cover the building(s) during the time of construction and typical personal property coverage too, as well as your liability. As with any homeowner’s policy there are usually limitations of $1500 - 5000 for theft of your personal tools so make sure, if you are helping out, your tools are well marked with permanent markers and well secured when not in use as tools are a high theft item. (While many companies have a construction surcharge on course of construction policies, I have found a preferred company that has no surcharge throughout Washington State and they have great rates. And, when the home is done, in most cases they don’t require the hassle of doing a new policy… it rolls right into your homeowner’s policy.

It can be cost effective to buy construction materials now in situations where there are strong indications that prices may increase in the near future. Sometimes you can buy now but have delivery later; whereas some materials may need to be delivered now. I offer, on the same course of construction policy, an endorsement that covers theft of building materials up to $10,000. The cost of this endorsement is just $150.

Statistically, 20% of homeowners are underinsured after a total loss paying the extra out of pocket; often many tens of thousands of dollars because the homeowner, insurance company and the insurance agent all estimated the home replacement cost incorrectly. So once your home is completed, be sure to contact your insurance agent to update your replacement cost. (Homes usually cost 12-15% more than budgeted!) I am one of the few Washington agencies offering a company providing unlimited dwelling replacement cost for your qualifying homes, so in the event your home replacement costs more than estimated, you are still covered!

Other Benefits: Identity Theft restoration service is included free with the all homeowners policies! Best policy also provides $25,000 reimbursement. Literally up to 50% discounts on both home and auto insurance for good to excellent credit rating. (I have saved people up to $1000 a year on just one home.) Affluent clients can get expanded theft coverage for jewelry & tools, worldwide liability, all policies in 1 package policy with just 1 bill.

Additional Tips Regarding Your Contractor:

I recommend you verify in writing that your General Contractor has a Contractor’s Liability policy of at least 1 million dollars – to cover at least the home replacement cost. I also recommend that you get your contractor to agree, in writing, that all subcontractor’s will provide evidence of contractor’s liability to the General, with a copy to you, prior to them starting any work on the property. Contractor’s buy these policies to protect their liability for property damage and injury resulting from their work. You can easily check to make sure your contractor and subs are licensed in Washington State at this site: http://www.dol.wa.gov/business/checkstatus.html

It can also be helpful to stipulate in writing with the General Contractor, for the home to be completed by a certain date or the contractor has to start paying you a daily amount, but allow enough time for reasonable construction delays – which are common. This will help ensure that if your contractor is overcommitted to too many people that your home stays at the top of his priority list. Do not agree to pay much beyond actual work performed. If money for materials is needed, you can make the check out to both the materials company (specifying your project) and the contractor if needed. This ensures that money provided to your contractor for “materials” actually gets spent on materials for your home.

Eric Kossian

eric@leavenworthinsurance.com

Leavenworth Insurance

11756 Hwy. 2, Ste. 1, Leavenworth WA 98826

Ph. (877) 548 – 5488

Click Here to Read a Previous Interview with Eric and his company Leavenworth Insurance

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Allyson and Geordie Romer

Leavenworth real estate agents - Allyson and Geordie Romer

For over a decade, Allyson and Geordie have been serving clients in the Leavenworth-area real estate market. Together, they work tirelessly to stay on top of the regional market and present the most relevant opportunities to their clientele.

When not in the office, they can be found exploring the endless recreation opportunities of the area in all of its seasons.

 

Testimonials

 

Geordie provided excellent real estate representation! We appreciated his detailed knowledge of the market, his up front and honest approach, and his negotiation skills.
As reviewed on Zillow  – 

- Laura Anderson

 

 

As “west siders” looking for a getaway near Leavenworth, Geordie provided insight … his knowledge of design features important in a “snowy winter wonderland” was appreciated. Thanks Geordie!
As reviewed on Zillow  –
 

- Jean Stern

 

 

Geordie made this somewhat complicated transition easier for us…going above and beyond to help us work through issues that came up during the sale of our parents home. We appreciated his knowledge, attentiveness to details and his willing spirit.
Our family is grateful for Geordie!
As reviewed on Zillow  – 

- Terry Foster

 

 

Geordie was great in every way. We have been looking in the Leavenworth area for some time, and Geordie was absolutely the best for local knowledge, history and depth on neighborhoods, developments and the local market trends. He was very quick to respond (even when he was on his vacation) and worked very diligently to get all of our questions answered in a very timely fashion. We would recommend him highly to anyone looking to buy or sell a home. Very friendly, and helped us navigate all of the local options before we made an offer on the property that we purchased. Thank you, Geordie!

As reviewed on Zillow  – 

- Ryan Olsen

 

 

It was such a pleasure to work with Geordie and his wife, Allyson on our cabin purchase. They showed us a variety of locations, listened to what we wanted and helped us find the perfect match. Everything was smooth and not stressful, just relaxed and easy. We would definitely recommend Geordie and use him again if the need arises!

As reviewed on Zillow  – 

- Cammie Schlosser

 

Moving to Leavenworth?

Are you looking for a cabin or a condo in Leavenworth that your family can use as a home base when climbing, skiing or hiking around Leavenworth or Lake Wenatchee?

Maybe you rent a house here and have decided to stay, surprised how a summer of rafting somehow turned into seven years.

Maybe it’s time to escape the hustle of the big city (and its rain) and move to Leavenworth with its four seasons.

Maybe you bought a condo years ago, don’t seem to use as much, and it’s time to sell.

Whatever your motivation, we are here to help. If you are buying a home, the best place to start is with our Homebuyer’s Guide to Leavenworth.