Home

[ccassaday]

When my dad went to the bank this week they mentioned not needing insurance on the construction loan. This has me confused. I know the builders insurance would cover some things. But what about a natural disaster like a tornado. My aunt was building a house and it got hit by a tornado and they had to start over. Or something like a wind storm. Does the bank provide insurance or something. It doesn't seem right to me. We will be asking my sister who has built two houses. I think this is kind of important. You don't want to have your house destroyed by a tornado and be stuck with a construction loan and no insurance. Or even a fire.

[millieshops]

@ccassadayNot even close to dumb!

I'd ask my contractor AND the agent holding my HO policy.  This could well be an issue that changes from state to state, so anything we tell you here could be different where your dad lis building.

[Nomorebirthdays]

When we built our home about 10 years ago we got builders insurance through  the company that had our regular homeowners policy.

[Nightowlz]

I would call the company you have your homeowners ins with right now. They can tell you what you need to do. 

[ccassaday]

Thanks everyone. It is defiantly something we will ask. But it looks like in our situation that the bank said that because the builder carries all the neccesary insurance.

[Nightowlz]

---

@ccassaday wrote:
Thanks everyone. It is defiantly something we will ask. But it looks like in our situation that the bank said that because the builder carries all the neccesary insurance.

---

@ccassaday I would want to make sure of that. If you call your Ins company they can tell you.

[ccassaday]

---

@Nightowlz wrote:

---

@ccassaday wrote:
Thanks everyone. It is defiantly something we will ask. But it looks like in our situation that the bank said that because the builder carries all the neccesary insurance.

---

@ccassaday I would want to make sure of that. If you call your Ins company they can tell you.

---

We will make sure. But no bank is going to give you a loan without all the proper insurance. This is a builder the bank works with all the time. It's s pretty big builder not a small private contractor.

[millieshops]

@ccassadayThe bank will definitely protect themselves, but I'd still check to be certain that protection extends to your dad as owner as the construction goes along.  What happens if the building becomes worth more than the builder's loan and then something happens?  Will that matter?

[Sooner]

DO NOT JUST ASK!  SEE IT IN WRITING, KEEP A COPY IN WRITING.

[Just Bling]

I would trust that your dad and the relationship he has with the bank is a more than satisfactory answer.

I wouldn't suggest you tell him what to do and what the people on the forum say, can you imagine your dad going back to the bank and saying "my daughter talks to people on a shopping channel forum and they said ......"

There are specific laws for each State since building a house so those would apply.