New construction insurance Florida: 2 Smart Protections

Why New Construction Insurance Florida is Essential for Your Investment

Alt text: Bright, inviting photo of a Florida coastal neighborhood with pastel-colored homes, palm trees, and a clear sky.
Title: Serene Coastal Living in Florida
Description: A peaceful scene of new construction homes in a vibrant Florida coastal community, symbolizing peace of mind and protection through insurance.
Geo-tag: Naples, Florida, USA

New construction insurance Florida protects your financial investment through two distinct phases: Builders Risk Insurance during construction and specialized Homeowners Insurance after completion. With over 134,000 new homes built in Florida in 2022 alone, understanding these coverages is crucial for protecting your project from groundbreaking to move-in day.

Quick Answer for New Construction Insurance Florida:

• Phase 1 (During Construction): Builders Risk Insurance covers the structure, materials, and construction-related risks.
• Phase 2 (After Completion): New Construction Homeowners Insurance provides ongoing protection with potential premium savings.
• Who Needs It: Property owners, contractors, lenders, and developers.
• Florida-Specific Benefits: Coverage for hurricanes, windstorms, and other regional risks.

Florida’s climate presents unique challenges like hurricanes and severe storms, making specialized insurance essential. The good news is that new homes built to modern Florida building codes often qualify for lower premiums and discounts due to their storm-resistant construction. Without proper coverage, you risk significant financial loss from theft, weather damage, or delays. This two-phase approach ensures continuous protection throughout your building journey.

I’m Paul Schneider, and our independent insurance agencies in Florida specialize in new construction insurance Florida. We represent over 50 insurance companies to find the best coverage and rates, ensuring seamless protection from active construction to your completed new build.

Understanding Builders Risk: Protecting Your Project During Construction

Builders Risk Insurance is the essential coverage needed while your Florida home is being built, protecting your financial investment against a wide range of perils common in the Sunshine State.

What is Builders Risk Insurance?

Builders Risk Insurance, also known as “course of construction insurance,” is a temporary property policy designed for the dynamic environment of a construction site. It provides coverage for your financial investment in the project, including the physical structure, on-site materials, and equipment intended to be part of the building. Unlike a standard homeowners policy, it’s custom for the unique risks of a building-in-progress, such as the vulnerability of exposed framing. The policy is temporary, beginning with construction and typically ending when the project is completed and occupied, ensuring you only pay for coverage during the active build phase.

Who Needs It and What Projects Are Covered?

Anyone with a financial interest in a construction project needs Builders Risk Insurance. This includes:

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Title: Reviewing Blueprints at Orlando Construction Site
Description: General contractor and homeowner discussing plans at a new home build in Orlando, Florida.
Geo-tag: Orlando, Florida, USA

• Property Owners: To protect your direct investment in the structure.
• General Contractors: To cover financial losses from damage to the work in progress.
• Lenders and Investors: Financial institutions often require it to protect their collateral.
• Other Stakeholders: Architects, developers, and project managers who have a financial interest.

Builders Risk is versatile and covers a wide array of projects, including new construction (single-family homes to commercial buildings), major renovations and remodels, and custom homes.

Learn more about Builders Risk Insurance in Florida

Core Coverages for Florida’s Unique Risks

Builders Risk Insurance in Florida is designed to protect the physical property from a broad range of perils, with special attention to our state’s climate. Coverage typically includes:

• Fire Damage: From sources like welding or electrical issues.
• Theft: Of materials intended to be part of the permanent structure, whether on-site or in transit.
• Vandalism: Malicious damage to the property.
• Windstorm and Hurricane Damage: Critical coverage for Florida, protecting exposed elements like framing and roofing.
• Lightning: Damage from frequent Florida thunderstorms.
• On-site Materials and Materials in Transit: Protection from the supplier to the job site.
• Negligence Damage: Accidental damage during the construction process.

A comprehensive policy can also cover “soft costs” arising from project delays due to a covered peril. These can include additional loan interest, real estate taxes, and lost sales or rental income, protecting the project’s financial timeline.

Explore Florida General Contractor Insurance
See more about Commercial Property Insurance

Common Exclusions and Policy Terms

It’s also important to know what Builders Risk typically doesn’t cover:

• Faulty Design or Workmanship: Losses from poor construction or design errors are generally excluded. This is often covered by a contractor’s general liability or professional liability policy.
• Employee Theft: Covered by a separate crime or fidelity bond policy.
• Tools and Equipment: A contractor’s machinery and tools require a separate Inland Marine Insurance policy.
• Professional Liability: Errors in architectural or engineering services.
• Flood Damage: This is a standard exclusion and requires a separate flood policy or endorsement, which is critical in many parts of Florida.
• Employee Injuries: Covered by Workers Compensation Insurance.

Policy Terms and Termination:

Builders Risk policies are temporary, usually written for 3, 6, or 12-month terms. Coverage ends when the first of the following occurs: the policy expires, the building is completed and receives a Certificate of Occupancy, the building is occupied, or it is put to its intended use. In Florida, premiums are often “fully earned,” meaning you won’t receive a refund if the project finishes early. This makes an accurate project timeline estimate crucial.

Insuring Your Completed Home: New Construction Homeowners Insurance

When you receive your Certificate of Occupancy, your insurance needs shift. The Builders Risk policy has served its purpose, and it’s time for a long-term homeowners policy. For new construction insurance Florida, this often means paying less for comprehensive coverage than owners of older homes, thanks to modern construction standards.

Why New Florida Homes Often Mean Lower Premiums

New construction homes in Florida frequently qualify for lower insurance premiums. Insurers see them as a lower risk for several key reasons:

• Modern Building Codes: New homes must meet Florida’s latest, most stringent building codes, which mandate stronger construction techniques and materials designed to withstand severe weather.
• Advanced Safety Technology: Features like impact-resistant windows, superior electrical and plumbing systems, and reinforced roofing significantly reduce the likelihood of common claims.
• Fire-Resistant Materials: Modern fire-rated doors and fireblocking techniques dramatically lower fire risk.
• Hurricane-Resistant Features: Hurricane straps, reinforced roofs, and impact-resistant doors are required by Florida codes and lead to substantial savings on windstorm coverage.

From an insurer’s perspective, a new home’s reduced risk profile translates directly into more favorable rates for you.

More about windstorm loss mitigation features

Opening up Savings: Discounts for Your New Construction Homeowner’s Insurance in Florida

Beyond lower base premiums, new homes qualify for numerous discounts that can lead to significant savings.

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Title: Smart Home Security System in New Florida Home
Description: Modern security system panel installed in a new construction home in Florida, offering improved protection and insurance discounts.
Geo-tag: Florida, USA

• Monitored Alarms: Centrally monitored fire and burglary alarms reduce the risk of major theft and fire damage.
• Gated Communities: Homes in neighborhoods with controlled access often qualify for discounts.
• Water Loss Prevention: Smart water sensors and automatic shut-off valves can prevent costly water damage claims.
• Accredited Builder: If your home was built by a reputable builder within the last five years, you may qualify for a discount.
• New Home Discount: Many carriers offer a specific discount simply because the home is newly built.
• Bundling Policies: Combining your home insurance with auto or other policies can open up substantial multi-policy discounts.

Our team specializes in identifying every available discount for your new Florida home to maximize your savings.

See other possible discounts

What Does New Construction Homeowners Insurance in Florida Cover?

Your permanent homeowners policy provides comprehensive protection for your home, belongings, and financial well-being.

• Dwelling Coverage: Protects the physical structure of your home. It’s crucial to insure for full replacement cost, not market value.
• Other Structures Coverage: Covers detached structures like garages, sheds, and pool cages.
• Personal Property Coverage: Protects your belongings (furniture, electronics, etc.) from theft, fire, and other perils. We recommend replacement cost coverage.
• Loss of Use Coverage: Pays for additional living expenses (hotel, meals) if your home becomes uninhabitable due to a covered loss.
• Personal Liability Coverage: Protects your finances if you’re found legally responsible for injury or property damage to others. It includes legal defense costs.
• Medical Payments Coverage: Helps pay for minor injuries to guests on your property, regardless of fault.

We can help you tailor a policy with the right coverages and endorsements to fit your new home’s unique needs.

Contractors Insurance: What Coverages Do You Need?

The Process: How to Secure New Construction Insurance Florida

Securing new construction insurance Florida is a straightforward, two-step process: protect the project during the build, then transition to protecting your finished home. With proper guidance, it’s a simple process.

Applying for Builders Risk Insurance

To apply for Builders Risk insurance, we’ll need key details about your project to find the best coverage and price. Be prepared to provide:

• Project Specifics: The location, type of construction (e.g., custom home, renovation), and materials being used.
• Construction Timeline: Your estimated start and completion dates. It’s wise to slightly overestimate, as Florida premiums are often fully earned, meaning no refunds for finishing early.
• Total Project Cost: The total cost of materials and labor, excluding the land value. This determines your coverage amount.
• Blueprints and Specifications: These provide a full picture of the project’s scope.
• Contractor Information: Details on your general contractor, including their experience and proof of insurance.

With this information, we conduct a risk assessment, shop multiple carriers for competitive quotes, and handle the application to keep your project on track.

Business Insurance for Construction

Transitioning to Homeowners Insurance

Timing is everything when transitioning from Builders Risk to Homeowners Insurance to avoid coverage gaps. Your Builders Risk policy remains active until the project is substantially complete, which is officially marked by the Certificate of Occupancy from your local building department.

Once you receive this certificate, it’s time to activate your permanent homeowners policy. We coordinate this transition to be seamless, often preparing your homeowners policy well in advance. Your new coverage can begin the moment your Builders Risk policy ends, so you can focus on enjoying your new home without worrying about insurance.

The Importance of Your Builder’s Insurance

While your policies protect your investment, your builder’s insurance protects you from their business risks. It’s essential to verify their coverage before work begins.

Alt text: A sample Certificate of Liability Insurance form for a construction company.
Title: Certificate of Liability Insurance for Florida Construction
Description: Example of a Certificate of Liability Insurance, important for verifying contractor coverage on Florida construction projects.
Geo-tag: Florida, USA

Never assume your contractor is properly insured. Always request a Certificate of Liability Insurance from their insurance provider. This document confirms they have active policies like General Liability (for property damage or injury they cause) and Workers’ Compensation (for their employee injuries). This layered approach—your insurance protecting your property and their insurance protecting you from their operations—creates a complete shield around your project.

Certificate of Liability Insurance
General Liability Insurance for Contractors in Florida

Frequently Asked Questions about Florida New Construction Insurance

Here are answers to the most common questions we receive about new construction insurance Florida.

Can I customize my Builders Risk policy?

Yes. While standard policies cover common risks, every project is unique. We can add optional coverages, called endorsements, to tailor the policy to your specific needs. A valuable add-on is soft costs coverage, which helps pay for indirect expenses like loan interest and real estate taxes if your project is delayed by a covered event like a hurricane. Other endorsements can cover theft of materials stored off-site or temporary structures like construction trailers.

Does Builders Risk cover my contractor’s tools and equipment?

No. This is a common misconception. Builders Risk covers what’s being built—the structure and materials that will become a permanent part of your home. Your contractor’s tools and machinery are their business property and must be insured under their own Inland Marine Insurance policy. This distinction is important: if lumber for your home is stolen, your Builders Risk policy responds. If your contractor’s saw is stolen, their policy responds. Always verify your contractor has their own adequate coverage.

Learn more about Inland Marine Insurance

When exactly does my Builders Risk coverage end?

Your Builders Risk coverage ends when the first of these events occurs: the policy term expires, the project is completed and you receive a Certificate of Occupancy, or the building is occupied. The Certificate of Occupancy is the key milestone, as it signifies the home is safe and legal to live in. It’s important to know that even partial occupancy can terminate the policy, as the risk profile changes once someone moves in. We manage this transition for you, ensuring your permanent homeowners policy activates seamlessly to prevent any gaps in coverage.

Conclusion

Building a new home in Florida is a major investment that requires proper protection from day one. The essential two-phase approach to new construction insurance Florida ensures your asset is safe from groundbreaking to move-in day.

The journey starts with Builders Risk Insurance, which provides a financial safety net during construction against Florida’s unique risks like hurricanes, theft, and vandalism. Once your home is complete, you transition to New Construction Homeowners Insurance. Your modern, code-compliant home will often qualify for lower premiums and numerous discounts.

Working with an independent agency like Schneider and Associates Insurance Agencies simplifies this process. We represent over 50 top-rated insurance companies, allowing us to find you the best coverage at the best price. We specialize in creating a seamless transition between policies, ensuring your investment is never unprotected.

Your new Florida home is a dream in the making. Let us help you protect it properly.

Ready to protect your new Florida home? Compare rates and find the perfect coverage for your project today.