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How to Insure a Home Being Constructed

If you plan on moving into a home that doesn’t yet exist, there’s more to it than finding the right contractor. You’ll also want to insure a home being constructed. That’s because a home being constructed is also vulnerable to risks like severe weather damage and theft.

 “There are several ways to insure a home being constructed,” says Terry McConnell, vice president, Personal Lines Underwriting, at Erie Insurance. “It mostly depends on who is building the house: a contractor working on behalf of a developer, a contractor hired by an individual or an individual looking to build his or her own home.”

There’s no place like it – and it’s yours, so make sure you protect it. Let’s talk.

If it’s a contractor working on behalf of a developer

McConnell explains that a contractor working as a developer typically has a builder’s risk commercial policy while the home is under construction. So you shouldn’t have to worry about how to insure a home being constructed if this is your situation.

If you’re hiring a contractor

While some contractors take care of the insurance as part of a turnkey construction project, it is more common to insure the home yourself.

At ERIE, if the home is being built by a contractor with a completion date within six months you can be eligible for a homeowner’s policy for the completed value of the home. “Unless the home has very high value, it is typically completed in this amount of time,” says McConnell, who adds that longer times are available for those who need it.

If you’re building your own home

Things are different if you decide to build your own home. “Unless you’re a contractor by trade, you’re more likely take longer to construct your home,” says McConnell. “It’s also more common for the construction to go on for years rather than for months. For that reason, the coverage we offer is more limited than the kind we would offer if you hired a professional contractor.”

Extra insurance for extra risks

Your homeowners insurance policy for a home in the course of construction only covers items that are permanently installed in your home. So building materials on the construction site but not yet installed are not automatically covered against theft and damage.

You can still insure items not yet installed by adding a theft of building materials endorsement to your policy. The endorsement lets you choose the level of coverage, which is in effect until the home is completed.

No matter which route you go, it’s worth talking with someone like an Erie Insurance Agent

. He or she can give you trusted advice about how to insure a home being constructed.

ERIE® insurance products and services are provided by one or more of the following insurers: Erie Insurance Exchange, Erie Insurance Company, Erie Insurance Property & Casualty Company, Flagship City Insurance Company and Erie Family Life Insurance Company (home offices: Erie, Pennsylvania) or Erie Insurance Company of New York (home office: Rochester, New York).  The companies within the Erie Insurance Group are not licensed to operate in all states. Refer to the company licensure and states of operation information.

The insurance products and rates, if applicable, described in this blog are in effect as of July 2022 and may be changed at any time. 

Insurance products are subject to terms, conditions and exclusions not described in this blog. The policy contains the specific details of the coverages, terms, conditions and exclusions. 

The insurance products and services described in this blog are not offered in all states.  ERIE life insurance and annuity products are not available in New York.  ERIE Medicare supplement products are not available in the District of Columbia or New York.  ERIE long term care products are not available in the District of Columbia and New York. 

Eligibility will be determined at the time of application based upon applicable underwriting guidelines and rules in effect at that time.

Your ERIE agent can offer you practical guidance and answer questions you may have before you buy.