Risk Conversation®

You’ve chosen the location, architect and general contractor to build your dream home, and calculated the costs – but there is one other source you should put on your checklist before breaking ground: your homeowners insurance carrier.

Many large insurers have a risk consulting team of building specialists who can identify overlooked risks and potential losses prior to and during construction. By identifying these exposures beforehand, your carrier can help you take steps to avoid underinsurance by providing a better approximation of the costs to rebuild your home if damaged or destroyed. In some cases, credits may be provided by the carrier to reduce the premium.

Consider the following pre-construction checklist from a risk consulting team when beginning to prepare for your home construction:

Alarm Systems. Once power is connected at the construction site, temporary fire alarm and burglar alarm systems are recommended – or may even be required – for installation to reduce property damage and theft risks. Modern alarm systems involve the use of heat sensors to detect a possible fire – while motion sensors supplemented with door and window contacts indicate a possible intruder. If you plan to display valuable art throughout the house, additional components like video surveillance may be required. Risk consultants can advise on these features before installation, reducing the prospect of expensive alterations once the house is built.  

Wind Damage. Architects and contractors secured to build a home in a waterfront or wind prone location will recommend installing impact resistant windows. There are different categories of impact resistant windows, which are rated to withstand sequentially higher storm categories. To receive an insurance premium credit or deductible waiver, risk consultants can advise on the proper window rating, as well as approved shutters and screens. They can further review all openings in the envelope of the house like skylights, basement windows, and doors and garage doors with glass panels, to ensure approved testing and specifications. A temporary plywood door, for example, is not approved protection.

Fire Protection. Prior to construction, it is important to determine the presence of a public fire hydrant within 1,000-feet of the home. If this is not the case, a “dry fire hydrant,” a non-pressurized pipe system connected to a water source like a lake, stream, pond, pool or underground cistern, may be required. Risk consultants can help ensure the water source is in accordance with the National Fire Protection Association’s 1142 standard for approval by the local fire department. They can also provide guidance on the installation of fire sprinkler systems and fire hazards like spontaneous combustion.

Water Damage. According to our claims data, non-weather-related water damage losses are the primary source of property damage to homes. Prior to construction or a major home renovation, risk consultants may recommend the installation of a flow-based water detection shut-off device. Once connected, the device determines average water usage; if excessive usage is detected, the flow of water automatically shuts off, reducing the risk of extreme damage.

A Valuable Partner. Depending on the insurance carrier, a risk consulting team may visit a future homesite three or more times, from the groundbreaking through final construction. Expect detailed discussions regarding the approximate costs of a total loss for rebuilding purposes. The goal is to make you whole in the event of a covered loss, by providing insurance to value.

To build your dream home without it turning into a headache, consider contacting your insurance agent to ask for a pre-construction review by carrier risk consultants—while you’re still in the planning stage.

Kelly Lespier is Assistant Vice President, Risk Consulting Premier Specialist.