Real Estate Agent · North Jersey · Member since 2016 · 76 posts · 29 votes
Hey all - I am working on a development project and we are 1 year in. We have had a lot of delays. A lot of planning has gone into the project which has taken a lot of time. But we are finally getting ready to break ground. My builders risk insurance needs to be renewed for another year - which we did. However they are threatening to drop us if they don't see 'significant' activity at the job site asap. They don't want to insure an inactive job site. I'm doing everything I can to move forward (of course) but we have been met with lots of challenges. And I am concerned about this.
Have you been in this situation before and how did you handle? Is it possible that no one would/could want to insure us?
Insurance Agent · Maumelle, AR · Member since 2015 · 131 posts · 41 votes
4y
Christie,
BR policies are like that especially if it's a big project. They don't want to insure something where work isn't being done. I've never seen someone actually get dropped though. If you think the project has stalled for a while you may look into a "vacant" policy depending on what's there now.
Real Estate Agent · North Jersey · Member since 2016 · 76 posts · 29 votes
4y
@Kevin Koone Thanks. They didn't want to insure as vacant policy. I asked for this instead and figured we'd switch back to builders risk as soon as demo schedule is finalized. But they said no to vacant policy. They did renew our builders risk but I don't want to see them drop us if they don't see enough progress soon enough.
Insurance Agent · Norwalk, CT · Member since 2016 · 2k+ posts · 1k+ votes
4y
Christine,
From your post I am guessing that this what I would call a Renovation Builders Risk. That would include an existing building. That type of policy can provide different (sometimes greater) coverage than a vacant dwelling policy. That is probably why they are looking for progress in the project. You mentioned demolition, that makes me think that was why they did not want to do a vacant dwelling policy.
Real Estate Agent · North Jersey · Member since 2016 · 76 posts · 29 votes
4y
@John Mocker Hi John there is an existing building that is already gutted and vacant. We are demolishing 75% of the building to rebuild new. It is a builders risk policy. I was hoping to do vacant temporarily so they won't be looking for progress all the time until I can guarantee progress. We are finalizing structural plans and demolition schedule right now.
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
What specifically is taking so long. It can't have been a year of just 'planning', right? Projects are usually well planned long before the money starts to flow, at least in every case I know....
IF you can identify who or what is causing the delay, then you can fix and move on.....
Insurance Agent · Norwalk, CT · Member since 2016 · 2k+ posts · 1k+ votes
4y
Christie,
Check with your agent to see if this is true for them as well, in my experience the companies writing the vacant dwellings do not want to insure it during the demo process. Once that is done they seem more willing. That could be different on a partial demo.
Real Estate Agent · North Jersey · Member since 2016 · 76 posts · 29 votes
4y
@Bruce Woodruff It has been a year of planning due to circumstances outside our control. @John Mocker We are not actively doing demo (yet). Which is why I don't understand. Maybe cause the building was previously gutted (by a prior owner) so they see that as 'active' demo.