There are plenty of factors to consider when building a new modular home for you and your family to live in. Designing the house, picking colors, and finding the right modular home manufacturer are thrilling aspects of building a new home. However, the hard parts are undoubtedly acquiring financing and gaining the necessary insurance.
Builder’s Risk Insurance
Most people who plan to build a modular home are usually aware of homeowners’ insurance. Homeowners’ insurance protects you when your home is destroyed by fire or any other disaster, and it even covers you in the event of a burglary or theft. On the other hand, a Builder’s Risk Policy does the exact same thing, but also offers coverage to your home while it is under construction.
If you have acquired a construction loan to finance the building of your new modular home, then your bank or financial institution will ask you to acquire Builder’s Risk Insurance. Builder’s Risk Insurance works just like a typical home mortgage, where the lender will withhold a certain amount each month in order to pay for the insurance of your home and your taxes.
Understanding Your Options
If you plan to acquire a construction loan for your new modular home, then you will not necessarily need Builder’s Risk Insurance. However, it is wise to have such an insurance policy in hand because it can help in the event of a fire or flood.
It is a fact that most people in the country are not aware of what Builder’s Risk Insurance actually is. They often ask their home builder why this type of policy is necessary. But as previously mentioned, if you want to protect yourself and your home during construction, then you should definitely have a Builder’s Risk Insurance. So, do not be hesitant to apply for one.
If you have no idea where to get a Builder’s Risk Insurance, then get in touch with your friends or family members who own small modular homes, as they will be able to point you in the right direction. You should also consult with your modular home manufacturers before making a decision.