Rest In­sured

Log home in­sur­ance ex­pert Fred Roberts an­swers the most fre­quently asked cov­er­age ques­tions, so you can have the peace of mind that your log home in­vest­ment will be well pro­tected.

Log Home Living - - CONTENTS - in­ter­view by Jan­ice Brew­ster

A log home in­sur­ance ex­pert an­swers the most fre­quently asked cov­er­age ques­tions, so you can en­sure your in­vest­ment will be well pro­tected.

Q:

Let’s start at the be­gin­ning: What in­sur­ance do home­own­ers need dur­ing log home con­struc­tion, and when should they get it?

A:

“Builders-risk” in­sur­ance is the pri­mary means to in­sure for prop­erty ex­po­sure claims dur­ing con­struc­tion. Builders-risk in­sur­ance is ac­tive while projects are un­der con­struc­tion, ren­o­va­tion, re­model or re­pair. It’s best to se­cure builders-risk in­sur­ance prior to start­ing the project. In the case of a con­struc­tion loan, builders-risk in­sur­ance is nor­mally re­quired be­fore the loan clos­ing date.

Q:

What does builders- risk in­sur­ance cover?

A:

A sim­ple way to look at builders-risk is to con­sider it like home­own­ers in­sur­ance but with­out per­sonal-con­tents cov­er­age. This type of pol­icy cov­ers the struc­ture and ma­te­ri­als dur­ing the con­struc­tion phase only. It can cover cer­tain types of loss, dam­age or de­struc­tion of prop­erty, but it ex­cludes cov­er­age for claims of de­fec­tive work or de­sign. Li­a­bil­ity is nor­mally not a part of a builders-risk pol­icy, but your agent should be able to pro­vide a stand­alone li­a­bil­ity pol­icy. Keep in mind that this li­a­bil­ity pol­icy is not a re­place­ment for work­ers comp and ac­ci­dent cov­er­age for your work­ers or sub­con­trac­tors.

Q:

How long does a builders-risk pol­icy gen­er­ally last?

A:

It’s 12-month in­sur­ance cov­er­age that nor­mally ends at the end of the 12th month, usu­ally with­out pos­si­bil­ity of re­newal; but in some cases, an in­sur­ance car­rier will al­low one 12-month re­newal for the same premium as the cost of ini­tial pol­icy. An­other pos­si­bil­ity is va­cant-dwelling cov­er­age, which is pretty costly, but can be a good op­tion if only 30 or 60 ad­di­tional days are re­quired to com­plete the home. Log homes’ com­ple­tion pe­riod is shorter than a con­ven­tional home’s, which in­volves many more steps to reach sim­i­lar re­sults. So, if your builders-risk car­rier can roll the pol­icy over to a dwelling pol­icy, you of­ten can achieve a sub­stan­tial sav­ings over­all.

Q:

When does the home­owner’s pol­icy take over?

A:

Once the con­struc­tion phase of your home is com­pleted and you are ready to oc­cupy, you will then need to have home­own­ers or dwelling cov­er­age in place. I rec­om­mend hav­ing a pol­icy ready to start a cou­ple of weeks in ad­vance to avoid sur­prises.

Q:

What makes some in­sur­ers hes­i­tant to in­sure log homes or ru­ral homes?

A:

The re­luc­tance by car­ri­ers to cover log or ru­ral homes comes from a lack of knowl­edge, not from in­creased risk. The log home in­dus­try is a spe­cialty area and, even though more and more peo­ple are re­al­iz­ing the ad­van­tages of log home liv­ing, the per­cent­age of log homes in the mar­ket is still small in com­par­i­son to con­ven­tional con­struc­tion. I rec­om­mend deal­ing with in­sur­ance agents who are fa­mil­iar with ru­ral or log home in­sur­ance for a smoother ex­pe­ri­ence.

Q:

Do log homes present an in­sur­ance risk?

A:

Log homes are not any greater in­sur­ance risk than con­ven­tional homes. It all comes down to lo­ca­tion; the dis­tance to a fire de­part­ment and hy­drant; and how fa­mil­iar your agent is with log homes. If your home, whether brick or log, is 20 miles from a fire de­part­ment and five miles down a wind­ing dirt road over two moun­tain­tops, your rate will be higher than it would be for a house along a busy city street ( but the view won’t be nearly as spec­tac­u­lar).

Q:

Are there things log home­own­ers can do to mit­i­gate risks?

A:

Yes. To help mit­i­gate risk for log homes, it’s wise to do the fol­low­ing:

• Pur­chase your log home from a known log

home man­u­fac­turer;

• Ob­tain in­sur­ance cov­er­age from an agent

fa­mil­iar with log homes, and

• Build your home within five miles ra­dius

of a fire de­part­ment.

Q:

Does it cost more to in­sure a log home?

A:

Not nec­es­sar­ily, but three things that can in­crease rates on your log home in­sur­ance cov­er­age: Us­ing an in­sur­ance agent un­fa­mil­iar with log homes, lo­ca­tion and over­all roof age and con­di­tion.

Q:

Is a new log home eas­ier to in­sure than an older one?

A:

There’s no dif­fer­ence in in­sur­ing a new log home ver­sus an older log home, as long as roof, elec­tri­cal and plumb­ing have been up­dated and an over­all good con­di­tion has been main­tained.

Fred Roberts is an in­sur­ance agent and owner of Log Homes In­sur­ance (loghome­sin­sur­ance.com).

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