It seems that there is a building and renovating boom taking place lately, with new homeowners designing custom plans to build, or long-time homeowners finally taking the plunge and making much needed changes to their existing homes. With all of this building going on, it’s easy to start wondering if those homeowners are as protected as they think they are, from an insurance and financial standpoint. There are unique insurance challenges when it comes to construction of any kind, be it from the ground up or just minor renovations. If you’re planning to build a home, or just remodel one, there are some insurance tips you need to be aware of.

If you are in the group of those who are planning to build their own custom homes, there are a couple of questions to start with when deciding on your insurance needs. First, do you own the property on which the house will be built? If the answer is yes, it is in your best interest to obtain basic liability coverage while the home is under construction. As the owner of the property, you will be partially responsible for any accidents which may occur on the site, such as if a child is walking through the unfinished home and is injured. If you do not own the land on which the home is being built, but will take possession of it after building is complete, there is no need to worry about liability.

Second, will you own the home while it is under construction, or will it be in the name of the contractor who is building it? Again, if the contractor will be the owner during construction, there is no need for additional insurance. However, if you will be the homeowner during construction, you will need to look into builder’s risk insurance as well as a fire and dwelling policy. Builder’s risk insurance is invaluable during construction, as it covers the theft of building materials, from copper wire to stainless steel dishwashers. Fire and dwelling policies, on the other hand, provide no protection against theft, but covers damage to the physical property during construction. Of course, smart home builders will also check to make certain that their contractor is fully insured, even if it means doubling up on policies.

If you are part of the growing trend of home renovations, you are, of course, not exempt from additional insurance. Though you most likely have homeowner’s insurance, it is almost a guarantee that your policy does not cover renovations, nor will your agent be willing to add renovation insurance to your existing coverage. It will be in your best interest to purchase additional insurance to get you and your home through renovations. Builder’s risk policies, as mentioned above, are great for renovations, as well. These policies will protect your home under renovation, as well as the construction materials which will almost surely be left unsecured at some point.

If you are planning major renovations, in which interior walls or floors will be exposed, you may want to talk to your insurance agent about temporarily switching your homeowner’s insurance to a home under construction policy. Normally used by contractors, these policies will protect your existing home as though it were a new home being built. And for major changes, there really is no better way to protect your assets.

When building or renovating your dream home, insurance may be the very last thing on your list of worries. But when push comes to shove, being protected with proper insurance policies can be the only way to make certain your dream home doesn’t turn in to a nightmare.