What Construction Companies should know about Texas Builder’s Risk Insurance This Spring Season
As we start spring, construction projects are likely to increase now that the winter months have come to an end. Unfortunately, spring is also the season of storms, so it is extremely important to have the right builder’s insurance set in place in preparation for a bad situation.
The purpose of construction insurance is to protect construction projects while they are taking place. So in the case of an incident that leads to damage, construction companies and project owners are protected against any potential financial losses.
The reliable bad faith insurance attorneys of Millin & Millin want to provide you in-depth information on what construction companies should know about Texas Builder’s Risk Insurance this spring season.
Protecting Construction Projects from Storm Damage
Each year, storms, fires, and other disasters rock Texas, causing billions of dollars worth of damage to buildings and houses, including those that are still under construction. In a region that is susceptible to unforgivable spring weather, there is no question that builder’s risk insurance is essential as the likelihood of being impacted by a spring storm is greater than in other areas.
If this type of damage isn’t covered by your traditional builder’s insurance, it could drastically postpone a project, or result in them failing, if the financial loss is large enough.
What Does Builder’s Risk Insurance Cover in Texas?
Builder’s risk insurance can offer protection for delays, market loss, faulty workmanship, and other indirect incidents that result in losses. While not all builder’s risk policies are identical, the vast majority cover all-risk basis. Basically, it’ll take care of all causes of loss except for those not mentioned in the policy.
Generally, builder’s risk insurance policies cover:
- Fire damage
- Certain kinds of water damage
- Lightning
- Hail
- Explosions
- Theft or vandalism
- Materials, supplies, and equipment on-site
Coverage may be consolidated for the builder’s risk for extra costs that occur because of a construction delay. These construction costs include, but are not limited to:
- Real estate taxes
- Architect payments
- Bond and permit fees
- Legal and accounting fees
- Interest
- Prolonged general conditions costs like portable toilets and water
- Lost sales or rental income
It is worth noting that builder’s risk policies typically cover new construction expenses, meaning your insurance might just cover the recently renovated or fixed parts of the building if you’re working on an existing structure. The policy might only address the new construction costs’ value and dismiss any damages to the current structure.
What If My Builder’s Risk Claim Is Denied?
While insurance companies hold the right to deny certain coverage outside of your policy, some will reject perfectly worthy claims. Bad faith insurance acts are used to convince you that your insurer’s rejection is within their rights. A common tactic used is to say that your filed claim isn’t part of your policy – even when it is.
Exclusions are losses that aren’t mentioned in your policy. Your insurance provider may declare that your damages are excluded from the policy to get out of covering them. They may intentionally misinterpret your claim so they can completely decline it.
In some cases, your insurance may state that the damages already existed, that you didn’t notice the damage as pre-existing, or they might even accuse you of insurance fraud.
Fighting a Rejected Builder’s Risk Claim in Texas
Even if your claim may have been denied, you don’t have to give up on seeking coverage. If you think your insurance provider acted deceitfully, then you may be eligible to file a bad faith claim. An insurance company acts in bad faith when they fail to demonstrate their expected responsibility as an insurer. You may be able to file a claim against your insurance company and receive compensation for any losses you experienced because of the denial.
Insurance law is very complicated, so it is imperative to seek the right representation and resources to challenge an insurance company. Most insurers already have legal teams ready, so it’s especially crucial to prepare yourself for what’s to come.
Depending on any and all losses you faced because of your insurer’s acts, you may receive compensation for:
- Repairs
- Loss of income
- Loss of wages
- Attorney’s fees
- Interest
- Costs from extending construction
- Construction delay-related costs
- Mental anguish
Builder’s Risk Claim Lawyers
Completing a construction project is already a challenge on its own. When your insurance company doesn’t support you, it can cause you to feel overwhelmed. If you believe your claim was denied without a valid or legal reason, then do not wait to contact the insurance attorneys at Millin & Millin.
Our legal team is well-versed in bad faith insurance claims and construction accident litigation. Let us assist you through this process so you can finally get the compensation you deserve.