Should I have homeowners insurance on a building?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jul 16, 2021

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If you own any property, then you should seriously consider insuring it through your homeowners insurance policy. This is true even if the building is still under construction. With homeowners insurance, you can make sure that if the building is destroyed or damaged it can either be replaced or repaired to its original condition.

When you are making a determination about any homeowners insurance policy, you have to consider the cost of the insurance and the amount of value the building holds, both in appraisal value and value to you. If you feel that the building is worth being insured, and an appraisal of the building deems it worthy of coverage under an insurance policy, you should contact various insurance companies for quotes on premiums for a policy on the building. Having homeowners insurance on your property can benefit you in a number of ways, but mainly in that if your building is damaged by a natural disaster, you’ll be covered.

Because a property under construction does have value, especially once interior details are added, there can be significant financial loss if the building is damaged, vandalized or otherwise destroyed. As such, some banks and many builders will actually require you to buy homeowners insurance on your under-construction building as a condition of either signing a contract to build or issuing you a mortgage.

In some cases, you can get a special type of insurance called construction insurance that will cover you just through the building process. You may also be able to get insurance through a standard homeowner’s insurer who will issue you a policy that covers not only the construction but also the final home when built. In most cases, neither of these policies will cover injury to workers on site, who should be covered through your general contractor’s workers compensation insurance policy.

To get help understanding your homeowners insurance requirements, it’s in your best interest to consult with an insurance lawyer for advice.

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