5 ways to save on your builders risk insurance!
What does Builder’s Risk insurance cost?
If you’ve been in the construction industry for a while, you’ve probably realized that your regular insurance coverage doesn’t cover any renovations or work currently going on. Yes, there’s more to an insurance job than third-party damage.
So, what happens when a hurricane comes along and blows away all your progress? Well, this is where Builder’s Risk insurance comes in. Isn’t it quite expensive though? Not really.
In fact, here is a guide on how you can control your Builder’s Risk insurance cost.
5 Ways to lower the cost of your Builder’s Risk
- Pick safe locations for your construction work
Also known as Course of Construction (COC) insurance, Builder’s Risk usually costs between 1% to 5% of a project’s value. This usually translates to anywhere between $200 to $2000 in monthly premiums. However, the exact amount you have to pay is highly dependent on the construction location.
For instance, if the project is located in an area that is prone to theft and arson, you will pay more than someone constructing in a place that doesn’t face these risks. Moreover, you will have to pay more if the area you’re building in is prone to earthquakes, hurricanes, floods, or tornados.
- Try to finish your projects as fast as possible
Unlike other contractors’ insurance policies, Builders Risk insurance can be bought for fixed periods of 3 months, 6 months, or 1 year. Since policies that last longer generally cost more, you are better off finishing your project quickly. Also, the sooner you finish, the sooner the homeowner can move the work into their own policy.
- Consider getting a master course of construction insurance policy
If you are a general contractor who has a steady supply of building projects throughout the year, you would benefit from getting a master plan that covers you continuously and never expires. While it may seem costly at the moment of purchase, it is sure to be cheaper in the long run. Get your estimate in 3 minutes through Builders Risk Insurance.
- Hire good contractors and subcontractors
Before you even go around sourcing builder’s insurance quotes, you should first ensure you have a competent team. The more experience and expertise your contractors have, the less your Builder’s Risk insurance cost will be. A worker with a history of negligence, unexplained accidents, or theft can end up being an unnecessary liability.
- Get a good broker for the best builder’s insurance quotes
When you’re looking for the best Builder’s Risk rates, you should always enlist the help of an experienced broker. Since they regularly have to work with A+ insurance carriers, they can easily get you the most competitive rates. And with the digital wave, the best of them have moved entirely online.
So: what should Builder’s Risk insurance cost you?
As a rule of thumb, the cost of Builder’s Risk insurance varies between 1% and 4% of the total construction costs. However, the cost is contingent on the 5 factors we have listed.
The biggest tip: Shop for quotes before committing to one insurance company. Highly suggest checking out the specialists at Farmerbrown.com as they have been focusing in Course of Construction Insurance for over 20 years.
References
https://pcs.marsh.com/ca/en/insights/thought-leadership/course-of-construction.html
https://www.insureon.com/small-business-insurance/builders-risk/cost
