There are plenty of factors to consider and think about when you are building a new modular home for you and your family to live in. Designing the house, picking colors, and finding a modular home manufacturer is actually interesting and thrilling aspects of building a new home. However, the hard parts are undoubtedly acquiring finance and gaining the necessary insurances.
Most people who are planning to build a modular home are usually aware of homeowners’ insurance. Homeowners’ insurance protects you when your home gets destroyed by fire or any other disasters and it even covers you in the events of a burglary or theft. On the other hand, a Builder’s Risk Policy does the exact same thing but it also offers coverage to your home when 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 a Builder’s Risk Insurance. A 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.
On the other hand, if you are planning to acquire a construction loan for your new modular home, then you will not have to necessarily acquire a Builder’s Risk Insurance. However, it is wiser to have such an insurance in hand because it will certainly be helpful when your house is hit by a disastrous event such as fire or flood.
It is a fact that most people in the country are not aware of what a Builder’s Risk Insurance actually is and they often ask their homebuilders what is the need for acquiring such an insurance for their home. But as said, if you want to offer more protection to your home and yourself when you are building a new home, 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.