The decision to build your own home is an exciting one. Not only do you get to decide where to build, but you also get to determine where on the property the house will stand and how it will be integrated with the landscape.  However, such freedom of choice comes at a cost: the burden of being properly insured lies much more on a homeowner building from scratch than on the buyer of a pre-built house. Working with a contractor can relieve some of this pressure, but even with a contractor’s help there are five things every home builder should know about insurance before starting construction on a new home.

1. Often homeowners insurance alone is insufficient for the construction of a new house. As such, you will also want to research and consider builder’s risk insurance, which will protect you against specific dangers to a structure during construction. This type of insurance even protects materials, equipment and fixtures utilized in the construction process against damage due to fire, wind, lightning or vandalism. However it is important to remember that builder’s risk insurance is a separate addition to homeowners insurance and its cost should be calculated into initial financial planning.

2. When choosing the location of a new house, you should keep in mind certain aspects of the locale might affect the cost of your homeowners insurance over time. Such factors might be as predictable as the distance to the closest fire department, or unpredictable as the weather trends of the area. If you plan to settle in a town that is in a high-risk area for earthquakes, floods, hurricanes or tornadoes, be sure your policy offers as much available protection against inclement weather as possible. And keep in mind that basic home insurance does not protect you against floods and/or earthquakes.

3. Even if you are working with a reputable contractor to build your home, you should look after your own interests when it comes to insurance. Acquiring your own liability insurance can help protect you as a contractor’s priorities might be different than yours. In addition, having homeowners insurance arranged before breaking ground will protect against mishaps that the contractor’s liability coverage will not. Liability insurance IS usually part of basic homeowners insurance, and your agent will be able to discuss this with you.

4. Try to design your home with safety and security in mind. Although initial expense is often a deterrent, incorporating some safety and security features into the design of your home could reduce the cost of your homeowners insurance. An example is installing fire sprinklers, which have been recently proposed and debated in a bill and may someday be a requirement in new homes.

5. Finally, it is also important to gather insurance quotes from several sources. While this may seem an unnecessary complication in an already complicated process, shopping around for insurance will you allow to find an agency that provides you with the best options based on your financial situation, construction costs and the planned duration of construction. However, make sure you read all the clauses and understand who is responsible for which eventualities before finalizing any agreements.