Insurance is essential when building a house. These protect the construction project and the future homeowner against damage. That’s why important insurance policies for builders cover a variety of risks: damage from fire, flood, lightning or explosion to theft and vandalism.
Construction insurance protects against unforeseeable damage to the structure during the construction phase. Whereas builder’s liability insurance covers risks if someone gets injured on the construction site. But are all these insurances really important for building a house?
Important insurance when building a house
Important insurance policies when building a house include:
- Construction insurance
- Construction worker accident insurance
- Builder’s liability insurance
- Fire shell insurance
- Construction completion insurance
Construction insurance
Construction insurance covers unforeseen damage that may occur during the construction phase. For example, through vandalism, flooding, storms or theft of building materials. It therefore protects against financial losses that are not covered by the construction company.
However, the following points should also be included in the insurance:
- Costs for garages and/or carports
- Theft protection for parts of the building that have already been installed
- Insurance of the glazing until the end of construction
Construction worker accident insurance
If family volunteers come to help with the construction at the weekend, construction worker accident insurance should be taken out. Only then will the costs in the event of an accident be covered by friends, spouses and relatives.
Otherwise, the builder will have to pay for the damage himself. Because the construction helpers are not protected by the construction trade association.
Builder’s liability insurance
Builder’s liability insurance protects the builder from liability risks that can arise when building a house. If an accident occurs on the construction site in which third parties suffer damage, this insurance will cover the costs of claims for damages.
This policy is essential because the builder is liable for everything that happens on the construction site.
Fire shell insurance
During the construction period, fire shell insurance offers protection against fire damage to the unfinished house. It is often included in homeowners insurance and is transferred to this once construction is completed.
It is advisable to take out this insurance in order to be protected from the financial consequences of a fire during the construction phase.
Construction completion insurance
Construction completion insurance protects the builder from financial risk if the construction company is unable to complete the work as agreed (e.g. insolvency). It covers additional costs incurred to complete the construction project with another company.
This insurance gives builders an additional level of security that their construction project will be successfully completed despite possible adversities.
Insurance house building costs: an overview
The cost of insurance when building a house varies considerably and depends on several factors. These can be:
- Size of the construction project
- Location of the property
- Scope of insurance coverage
- Individual risk factors of the builder
Insurance costs when building a house
Below is a concrete overview:
- The costs of construction insurance can be between 0.1% and 0.3% of the construction cost – depending on the construction period and the risk of natural events such as floods or lightning strikes.
- The annual premiums for the Builder’s liability insurance are usually between 100 and 300 euros, depending on the construction project and the insurance sum chosen.
- If you also take out residential building insurance for the period after the house is built along with the fire shell insurance, the fire protection insurance for the shell is free.
- The cost of construction completion insurance depends on the general construction costs, the scope of the project, the term of the insurance and various individual conditions. Between 0.5% and 2% of the total construction costs are usual.
Frequently asked questions about insurance when building a house
What insurance do you need when building a house?
Construction insurance, builder’s liability insurance and fire shell construction insurance are essential. These policies protect the builder from financial risks caused by damage, accidents on the construction site and natural damage to the completed home.
How much does insurance cost when building a house?
The costs vary depending on the type of insurance, the insured amount and the individual risk factors of the construction project. A careful risk analysis and advice from an insurer can help to optimize costs.
Which insurance is unnecessary when building a house?
Whether insurance is considered unnecessary depends on the specific circumstances of the construction project and the individual risks. In general, builders should not choose insurance policies whose content overlaps with other policies or whose specific risks are not relevant to the construction project.
2024-04-07 12:31:06
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