Building a custom home is one of life’s most exciting investments. But from the moment construction begins, your project faces risks that standard homeowner’s insurance can’t handle. Course of Construction (COC) insurance fills that gap, protecting your investment every step of the way.
What Course of Construction Insurance Covers
COC insurance protects the structure under construction and the materials that will become your home:
The Structure Itself – Fire, wind, hail, theft, and vandalism coverage for the building as it rises from foundation to completion.
Building Materials – Coverage extends to lumber, fixtures, appliances, and equipment whether they’re on-site, in transit, or temporarily stored elsewhere.
Soft Costs – Optional coverage for indirect expenses like additional loan interest, permits, or architectural fees if construction delays result from a covered loss.
Important Note: COC insurance doesn’t cover normal wear and tear, faulty workmanship, flooding (unless added separately), or your contractor’s tools and equipment – that’s their responsibility.
Your Builder Has Insurance – But It’s Not the Same Thing
Your contractor’s insurance protects their business, not your investment. Here’s the difference:
Builder’s Insurance Covers:
- Injuries to their workers (workers’ compensation)
- Damage they cause to neighboring properties (general liability)
- Their tools and equipment
Your COC Insurance Covers:
- The structure you’re paying for
- Materials that will become part of your home
- Your financial stake in the project
Both are essential. If fire damages your half-built home, your COC policy responds. If a worker gets injured, the builder’s workers’ compensation handles it. Without your own coverage, you’re exposed if something happens to the actual structure.
When to Secure Coverage
Start the conversation with your insurance advisor as soon as your construction plans and financing are finalized. You’ll need proof of coverage before any work begins – most lenders and contractors require it.
The policy takes effect when construction starts and continues until you receive your occupancy permit and move in. At that point, you’ll transition to a standard homeowner’s policy.
Making the Transition Seamless
COC insurance doesn’t automatically become homeowner’s insurance – they’re separate policies requiring careful coordination:
The Switch Happens When:
- You receive final inspection approval and occupancy permit
- The home is ready for occupancy (even if you haven’t moved in yet)
- Your lender converts a construction loan to permanent financing
Best Practice: Arrange your homeowner’s policy to start the same day your occupancy permit is issued. Let your insurance advisor know your estimated completion date a month or two in advance so they can coordinate the transition without gaps in coverage.
Your dream home deserves protection from the very first day of construction. Course of Construction insurance ensures that protection is in place, giving you confidence that your investment is safeguarded as it becomes reality.
Building your dream home? Want to ensure your construction project is properly protected from day one? Reach out to privateclient@brunswickcompanies.com or call 1-800-686-8080 to learn more.
