Dumb question on insurance on construction loan - Page 2

CrazyDaisy · ‎03-20-2010

While every state has different requirements, I believe that the builders insurance covers all losses till the structure obtains a certificate of occupancy from the building inspectors. There is no harm in checking.

Someday, when scientists discover the center of the Universe....some people will be disappointed it is not them.

ccassaday · ‎10-21-2010

@Just Bling wrote:
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.

Lol. Seriously. That would never happen. My mom and I were just having a conversation and that came up. We have had a family member actually go through their house being destroyed while building. I was just curious.

CelticCrafter · ‎03-09-2010

@ccassaday wrote:
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.

Are they talking about property insurance or a life insurance type deal to make sure the loan is paid should anything happen?

ccassaday · ‎10-21-2010

@CelticCrafter wrote:
@ccassaday wrote:
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.
Are they talking about property insurance or a life insurance type deal to make sure the loan is paid should anything happen?

Not life insurance. Talking about property insurance. I am pretty sure after thinking about this and googling it the builder carries all the insurance.