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Covering Your New Florida Home While It’s Under Construction
June 14, 2018
If you buy a new home in Florida, you know the importance of obtaining comprehensive homeowners insurance to protect your investment. What happens if you are having a new home built from the ground up? How do you insure a home under construction?
Olympus Insurance provides a special kind of policy for property owners who have a “Dwelling Under Construction”. This policy is known as a DUC Endorsement, and can easily be converted into a standard homeowners (HO3) policy once construction is finished and the residence is occupied.
What does DUC Coverage apply to?
Dwelling Under Construction coverage is designed to protect the building under construction in much the same way as a completed house, from damage that could occur due to weather or other events. It can be used for homes intended for regular full-time occupancy, as well as for seasonal, secondary, or rental homes. However, some special coverages apply, including:
Any building materials on the site (up to 10% of the total available coverage) or in transit to the site (up to $25,000)
Debris removal (up to $10,000)
Water back-up and sump overflow (up to $5,000)
Loss of valuable papers (up to $10,000)
Major appliances (such as microwave, oven, range, refrigerator, dishwasher, washer, dryer) if in a secured home under construction with all methods of ingress/egress secured and locked (windows and doors)
What does DUC Coverage not apply to?
Dwelling Under Construction coverage doesn’t apply to contents or amounts normally covered for fair rental value or loss of income – as these risks don’t exist with home under construction. DUC policies also exclude:
Credits on premiums usually given for homes with security systems
Spec or demo homes
Homes being built by other than a licensed contractor
Why obtain DUC coverage?
A home being built can still be damaged by a weather or fire event. Obtaining coverage for your home while it is being constructed can help protect the investment you’ve already made.
Once your new home is complete, it is easy to convert your DUC policy into a HO3 policy – the standard for homeowners’ insurance in Florida – or a DP-3 policy (for landlords renting a property.) You can also add additional insurance such as Scheduled Personal Property Insurance to increase your coverage in case of loss or theft of items that may exceed standard coverage limits.
If it takes a long time to build your new home, a DUC policy can be renewed at the one-year mark, but this request must be made 30 days before the end of the initial one-year period.