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builders risk

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What is the name of your state? NC

Can anyone explain when and what the builders risk policy covers? When a new construction goes way,way,way over budget, the builder is improperly licenced and outstanding repairs exceeds 185,000 who do you sue?
 


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We contracted with a builder in 4/03 to construct a home on our existing land. The builders office is located at the entrance of the gated community we were building in. Silly us, do to the location and the fact that he was the primary builder in the subdivision we never pulled his licence. STUPID- We know. Anyhow, the contract amount was for 500k. We requested monthly statements and were always told we were under budget. One weeek prior to move in, the builder stated that we might go over budget, but no more than 20k. We felt okay with this even though there weere no change orders. Upon move in we had spent 40k out of pocket as we paid for light and plumbing fixtures during building hoping to lower amount needed to finance. When we sat down with builder to go over expenses the house was 90% complete and then he now said our final total was 610k not including our 40k. We left the table and contacted our attorney. The builder returned the following day and we agreed to pay 550k and the home would be complete within 2 weeks. As time passed major issues were discovered: heating system could not carry the load and was zoned vertically in a 3 story open floor plan, leading to the zones fighting each other (the power bill was running 600 a month and we were either very hot or freezing). Then the drywall began cracking throughout the home. These are just two examples. After we had been in home 4 months the builder had failed to make any repairs as promised. Upon contacting the licensing board to file a complaint we discovered that he was only licenced to build up to 350k. To avoid a three page document- we threw builder off job, licensing board investigated and revoked licence, estimates for repairs by new contractor 185k, builder has left state, we have an attorney. Just hoping to gain info to figure out direction we are headed in. thanks-
 
B

bucky_sr

Guest
Builders risk

Sorry to hear about your situation.

A builders risk policy covers your project for physical loss or damage from a covered peril. Typical perils covered are the same ones that would be covered by your homeowner's policy. The only difference is that a builders risk policy expands the definition of the covered property to include the house under construction. I would also review the exclusions or losses not covered section to see if you have any ability to recoup some of your damages under the faulty design or errors and omissions wording. There may be coverage for the loss resulting FROM these errors.

What you may also be referring to is a surety bond which I believe is the policy that is triggered when your contractor defaults on a project.

Check with your insurance agent, he/she should be able to guide you on this.
 

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