Step by step to your own dream home: What insurance do you need to build a house?

5 min

  • The road to a dream home that is ready to move into is rocky and full of surprises. The unexpected can quickly result in high costs.
  • You can protect yourself against the most common problems when building a house with inexpensive insurance.
  • In this guide you can find out which insurance makes sense for builders and which you can even get free of charge if you insure the finished house afterwards.

House building: sensible insurance for builders

Prospective homeowners are aware that they will have to insure their soon-to-be home including their belongings. Building liability, elementary insurance, and of course household contents insurance – these are all common insurance models. What is often not so clear is that building a house also requires insurance. It is certainly the case that the property developer likes to include a part in the construction price. However, other insurances are the responsibility of the client himself. This article takes a look at that.

Securing financing: Term life insurance helps

Most of the clients initially turn every penny three times and do the math. The financing is in place, it even looks secure. But only very few can Mortgage lending Truly secure for twenty or more years. Those who can do this usually do not finance the construction, but build from the postage fund. Many also save on construction costs by promoting house construction with their own contribution. A lot can happen over a period of decades:

  • disease – the builder becomes seriously ill for a long time. The loan installments can hardly be borne.
  • Tod – If the client dies, the family is not left empty-handed, but with financing that has yet to be borne.

It is therefore worthwhile for everyone Builders with families, term life insurance complete. The family uses this as the beneficiary after the death of the policyholder and thus secures the continuation of the construction project in a roundabout way. However, term life insurance only applies in the event of death. It does not help against illness and the resulting financial losses. Here builders have to look for options separately.

Term life insurance is of course particularly suitable if there are family members or descendants. Those who build purely for themselves and exclude that a family is founded or that there are relatives, can do without it. A comparison helps when looking for a suitable policy. There are also tariffs who forego a health checkif necessary.

It doesn’t work without builders’ liability

A builder is liable for accidents on his construction site. Most building owners would now say that they are the client, but not the executing force. That’s true, but the client is always legally responsible. A number of providers of solid and prefabricated houses also offer insurance through partners. Nevertheless, the following applies:

  • Compare – The builder’s liability should always be compared. It is not uncommon for the already existing personal liability insurance to be expanded to include builder insurance.
  • Start – The client’s obligation begins with the signing of the contract. It should therefore exist from this point in time. It is based on the value of the building project, with a minimum insurance sum of three million euros being recommended.
  • The End – With the completion of the construction project, the builder’s liability insurance ends, alternatively after up to three years after the start of the insurance. Tip: If the house is built, but there is still gardening and land work to be done, the insurance should be maintained.
  • Personal contribution – Many builders reduce construction costs through their own work. You must definitely tell the insurer about the project, because only then will accidents on your own initiative and by friendly helpers be covered.

Construction companies now offer builder’s liability in included packages. If the conditions are right, there is of course nothing wrong with using it. Otherwise, it never hurts to look at other insurers and their services and costs.

Other important insurances

In addition to the important builder’s liability insurance, there are other insurances that are highly recommended during the construction phase:

  • Fire shell insurance – this is a residential building insurance covering the shell and construction during the construction phase. Many home insurance policies already include this fire insurance. If this is the case, the residential building insurance is simply taken out before the groundbreaking ceremony and later switched to the normal building insurance.
  • Construction insurance – Floods, storms and storms can seriously damage the construction site – especially with conventional houses. Other construction projects fall victim to theft, vandalism or just the negligent actions of construction workers. Construction insurance applies in all of these cases. The insurance cover is never longer than 24 months.
  • Accident insurance for construction workers – Anyone who lends a hand on the building themselves and asks friends or family for help should consider this insurance. But: the helpers have to competent professional association, for which some contributions are still due. The protection also applies without a registration, but the builder sometimes receives a fine. The private construction worker insurance also intervenes and covers differences.
  • Liability for undeveloped land – not every construction project starts immediately. But the builder is also responsible for safety on undeveloped areas. The liability insurance for these properties covers these accidents and ends with the groundbreaking ceremony.

Another type of insurance that builders should think about is builder’s legal protection insurance. The insurance usually has no waiting times and could also be taken out during the construction phase, but it has clear advantages right from the start. This legal protection insurance helps builders if there are defects or damage to the building. Occasionally, the insurance company pays the costs of a building expert and supports building owners in demanding repairs and legal disputes relating to the construction. In most cases, it can only be taken out in combination with the typical builder insurance.

Tip: Regardless of the legal protection insurance, builders should insure themselves and always have any construction and renovation project accompanied by a building expert. Hardly any building owner is able to identify defects or weak points before they cause real damage. Independent building experts accompany the construction project from the start, carry out interim acceptance tests, document all steps and, if there is a legal dispute, are immediately available as real witnesses thanks to their documents.

Conclusion – better hedge properly

Insurance for builders is practically part of the ancillary construction costs. You should not save here, because if accidents happen, building owners will sometimes never be happy financially in their lives. In addition to the typical insurance, legal protection insurance should be taken out. On many construction sites there are mistakes or minor defects somewhere, whoever has a strong partner at their side and who may even have involved a building expert right from the start, has the best chance of a quick and undisputed repair of the damage.

One more tip at the end

Insure the shell and later switch to residential building insurance

Sooner or later, homeowners insurance is strongly recommended. With some providers, it is worthwhile to take out an early contract. In the context of actions there is often namely a free fire shell insurance before the building is finished. Such insurance covers damage to the building shell caused by fire or explosion, lightning strike and the like. For many financiers, fire shell insurance is a requirement for building finance anyway. So it pays to combine this with building insurance.

Read here the total costs you have to reckon with when building a house.

Photo credits: © (sorted chronologically or according to the order of the images used in the buying guide)


Passionate about DIY for over 10 years and all the new tools, I give you through this blog all my advice, tips, tests in all areas: carpentry, electricity, masonry, gardening, home automation ...


Your email address will not be published. Required fields are marked *