The Ins and Outs of Course of Construction Insurance
If only Mother Nature and all that will be, were predictable. Then you could plan construction accordingly, to circumvent fire, water and earthquake damage, theft, or vandalism. But quite the contrary, anything could happen to the raw materials you’ve purchased for your soon-to-be beautifully renewed home. This could mean a large investment loss that typically falls outside the limits you have in place with standard homeowner’s insurance.
Course of Construction (COC) is a special type of insurance that can reimburse the cost of repair and replacement should construction-related materials and equipment be lost. It provides peace of mind for both homeowners and contractors, that funds are likely to be available for re-building or starting over, if need be.
You can start coverage just before materials are delivered to the worksite (consider all that’s placed at the side of the driveway, beside or behind the house, in addition to your other purchases.) Coverage can cease when work has been completed.
Beyond a mere safety measure, COC coverage can be required by city, county, or state building codes. When working with a general contractor or builder, you may specify in your
contract which party will obtain COC coverage. Though funds paid from a claim may ultimately go to a contractor to rebuild damage, if the homeowner owns the policy they are the recipient of the benefits and can therefore maintain control of those funds and how they are allocated.
As with most insurance policies, COC provides for both standard and extended options. Items often excluded from coverage but typically available as add-on protection include earthquake damage, goods in transit or storage, scaffolding and poorly executed plans.
After your project is complete, remember to revisit your homeowner’s insurance policy to confirm it’s adequate for your home, that no doubt, now has greater value (and is a greater investment of yours). Increased square footage, the latest energy efficient windows or appliances, a new fire-retardant roof, or a more sophisticated security system will impact the appropriateness of the protection you secure.