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    New Build Home Insurance: What You Need to Know

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    building home insurance Canada

    When building a home, insurance coverage can get a bit complicated. Find out which policies you need in order to be protected during construction.

    Although building a new home is an exciting time, there are a lot of different things to consider. From floor plans to tile samples, you may be feeling overwhelmed with everything that you need to think about. For example, what type of insurance do you need to protect yourself while constructing a new home?

    While it may not be as glamorous as selecting your kitchen backsplash, understanding your insurance coverage is one of the more important aspects of building a house. Unfortunately, it’s not as straightforward as having just one type of policy. This is true whether you’re the homeowner or the construction manager.

    In this article, APOLLO shares what you need to know about insurance when building a new house.

    Related: How much it cost to build a house

    Need Builder’s RiskInsurance?

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    Insurance During a Home Construction

    When building a new home, you actually require more than one type of insurance in order to be fully protected. This is true for both the property owner and the trades professionals involved in the construction project.

    There are two different types of insurance policies that should be acquired for a home build:

    1. Builder’s risk insurance to protect both the property owner and the trades professionals

    2. Homeowner’s insurance to protect the property owner

    Each of the above policies offer a different type of coverage for the insured and helps to financially protect you and the new build in the face of the unexpected.

    Related: When Should Builder’s Risk Insurance Start?

    Read on to learn more about these three kinds of insurance and why they are all necessary during the construction of a new home.

    1. Builder’s risk insurance

    Builder’s risk is the insurance that provides coverage to the actual job site. Without it, there would be a gap in coverage for the structure that is under construction.

    It offers coverage of the following:

    • Rental value

    • Additional living expenses

    • Change order coverage

    • Equipment breakdown

    • Sewer backup, flood, and earthquake

    The policy period for this type of insurance is from the beginning to the end of construction. For example, APOLLO’s Builder’s Risk Insurance can cover up to 24 months for a renovation project or new build. It protects the job site and any tools, equipment, or materials that are being used for that project.

    Who is covered?

    Anyone who is financially invested in the new build should be named under this policy. The responsibility of purchasing the coverage typically falls to either the property owner, general contractor, or construction manager involved in the project.

    2. Homeowner’s insurance

    So, if you or your general contractor has already purchased builder’s risk, do you still need homeowner’s insurance? Yes!

    Unlike builder’s risk, which protects the construction site, home insurance protects the property owner. Specifically, it provides personal liability coverage in the event of an accident.

    Who is covered?

    The property or homeowner is the one covered under this policy. It is the owner’s responsibility to buy this coverage.

    3. Trades and contractor’s insurance

    In the same way that homeowner’s insurance provides additional coverage on top of builder’s risk for the property owner, this type of policy protects trades professionals and contractors.

    It provides commercial general liability insurance that can help protect you in the event of property damage or the accidental injury of a client.

    Related: Questions to ask a contractor during an interview

    Who is covered?

    Trades professionals and contractors are the ones covered under this policy. It is their responsibility to buy this coverage for themselves or their small business.

    Protect Your New Home with the Right Kind of Residential Construction Insurance

    Building a new house is a major investment. Make sure you’re financially protected with the right type of insurance.

    As Canada’s leading digital insurance company, you’ll find comprehensive coverage for builder’s risk, homeowner’s insurance, and trades and contractor’s insurance.

    Start your online application now, and get covered in minutes.

    Related: Best time of year to build a house

    APOLLO Has You Covered

    Get the protection you need in minutes with custom Builder’s Risk Insurance from APOLLO.

    Learn More

    Originally published June 2, 2022, updated August 25, 2023

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