Wednesday, August 15, 2007

query: home is burned down while under a construction loan is there any insurance to cover loss

This type of damage falls under your hazard insurance policy aka fire insurance aka homeowners insurance. So, contact your insurance agent immediately.

I do hope that you purchased a policy prior to the start of construction. Most construction lenders require that the borrower put the insurance in place at closing.

I am very sorry for your loss. We often have to explain to our construction customers who complain about having to purchase the insurance before the house is completed that the materials on the site and the partially completed house may still be lost in a fire.

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