Builder’s Risk Insurance in Arizona: Everything You Need to Know
Arizona is currently experiencing unprecedented growth. Queen Creek and Maricopa, both in the Phoenix metropolitan area, are two of the fastest-growing cities in the US. All of this growth means more construction and, for insurance agents and brokers, more clients looking for competitive Builder’s Risk (BR) policies designed for the Arizona market.
So, with more of these kinds of clients walking through the door, it’s important that you can offer them competitive BR policies to win their business.
In this guide, we’ll walk you through everything there is to know about Builder’s Risk policies in Arizona. This includes what these insurance policies cover, how much they may cost, and the benefits of getting Builder’s Risk insurance through a specialized insurance provider like Distinguished. This way, whether your clients are constructing a high-occupancy commercial building in Phoenix or renovating a family home in Tucson, you’ll be able to get them affordable and comprehensive coverage that fits their needs.
What Does Builder’s Risk Cover?
Builder’s Risk or Course of Construction Insurance offers protection against unforeseen challenges or exposures that can arise during a new construction or renovation building project. These include natural disasters, like fires, lightning, or storms. It also covers deliberate acts of vandalism and theft.
Moreover, Builder’s Risk coverage encompasses the entire worksite, including other existing structures, building materials in use, and off-site property materials in transit. Even job site property, such as scaffolding or temporary structures, is included under this type of coverage.
With Distinguished, our Builder’s Risk policies can be tailored to suit the specific needs of the insured, offering additional coverages like soft costs, sewer backup, and coverage for temporary storage locations. This personalized approach ensures that each policy is finely tuned to address the unique insurance needs of every project.
How Much Does Builder’s Risk Cost in Arizona?
Typically, the cost of Builder’s Risk insurance ranges from 1-5% of the total cost of the renovation, new construction, or betterment project.
The insurance cost (or Total Insured Value) primarily depends on the project’s total cost, which is calculated based on either the actual cash value (ACV) or the replacement cost (RC).
- Replacement cost (RC) represents the total expense required to replace all items or property in its entirety, typically at current market prices.
- Actual cash value (ACV) is the RC minus any depreciation of property that’s been damaged or stolen at the time of loss. It represents the actual value for which the property could be sold, taking into account its current condition and age, and is generally lower than the cost of replacement.
Furthermore, insurance companies assess the following factors when putting together a BR insurance quote:
- Project location: Areas with higher crime rates, proximity to the ocean, or increased susceptibility to natural disasters may incur higher insurance costs.
- Construction materials: The type of materials used in construction, particularly rare or easily damaged materials like wood, can affect insurance premiums.
- Supplemental coverages: Additional coverages beyond the basic insurance package will contribute to premium costs.
Consider a contractor undertaking the construction of a commercial office building in downtown Phoenix with a total estimated project cost of $2,000,000. The project site is located in an area prone to dust storms and extreme heat during the summer months. The contractor also decides to include additional coverage for a temporary storage location due to there being limited on-site storage space.
The insurance agency calculates the premium for Builder’s Risk insurance, taking into account, among other things, the project’s location, environmental risk factors, and supplemental coverage for approximately $20,000 per year.
Why You Should Partner With Distinguished for Builder’s Risk in Arizona
Distinguished offers fast, flexible, and online Builder’s Risk Insurance, ensuring hassle-free coverage for commercial and residential construction projects in Arizona. Our seamless online platform allows for an easy transition to the next policy phase after construction completion, with flexible terms and extensions for maximum protection.
- Liability coverage: Our insurance program extends liability coverage, which is particularly beneficial when the named insured is not the developer or general contractor. This comprehensive coverage ensures peace of mind for all parties involved.
- Comprehensive coverage: Our Builder’s Risk insurance program provides comprehensive coverage protecting against most perils. Additionally, it can include commercial liability coverage, offering enhanced protection for your clients’ projects.
- Industry expertise: With a specialized Builder’s Risk insurance team boasting decades of experience, we offer tailored insurance solutions to meet the unique needs of every client. Our expertise ensures that clients receive the best possible coverage for their construction projects.
- Flexible coverage options: Whether it’s new construction, remodeling, or betterments, our Builder’s Risk Insurance offers flexible coverage options for commercial, residential, and mixed-use properties. This flexibility allows us to cater to a wide range of construction projects.
- Superior claims handling: Our in-house claims team comprises experienced attorneys dedicated to handling claims efficiently, fairly, and effectively. With our outstanding claims handling, clients can rest assured that they will receive prompt and comprehensive support during challenging times.
- Seamless transition and extension: Transitioning clients’ Builder’s Risk insurance to the property’s next phase, such as Vacant Building insurance or Umbrella coverage, is effortless with Distinguished. Our flexible policies also allow for easy extensions as needed, providing clients with added convenience and peace of mind throughout their projects.
Partnering with Distinguished for Builder’s Risk insurance ensures that your clients receive top-notch coverage, industry expertise, and superior claims handling, making us the ideal choice for construction insurance needs in Arizona.
Partner and Submit Business With Us Today
If you’re interested in getting a quote for one of your Builder’s Risk clients, you can start by registering your agency with us. Once that’s done, you’ll get access to our fully automated online Broker Portal, where you can submit business and get a quote within 24-48 hours.
For further insights, check out our Builder’s Risk Insurance eBook to gain in-depth knowledge about Distinguished’s policies. Partner with us today to streamline coverage for all of your Arizona construction clients.
Distinguished’s Builder’s Risk FAQs
Can I Submit Our Business Online?
Yes, you can submit your business through our online submission portal.
What Is the Max Total Insurable Value (TIV) for Your BR?
Our max TIV depends on the kind of project being insured.
- New Construction & Remodelers – TIV up to $25M
- $25M Maximum increased TIV for Fire-Resistive and Masonry Non-Combustible
- $15M Maximum increased TIV – Joisted Masonry
- $7.5M Maximum increased TIV – Frame
- Betterments Only: TIV up to $5M
What Policy Lengths Do You Offer for BR?
Distinguished offers Builder’s Risk policy terms of 3, 6, 9, 12 months, or longer.
About Distinguished Programs
Distinguished Programs is a leading national insurance Program Manager providing specialized insurance programs to brokers and agents with specific expertise in Fine Art and Collectibles, Environmental and Construction Professional, Executive Lines, Inland Marine, Real Estate & Builder’s Risk, Community Associations, Hotels, and Restaurants. Property and Liability products are distributed through a national network of agents and brokers. Serving the same core markets and partnering with the most stable and reputable carriers, Distinguished’s high-limit Umbrella programs remain the clear choice in its area of specialty for superior coverage, competitive pricing, and attentive service. Through thoughtful innovation, stemming back to 1995, Distinguished Programs fosters growth and opportunities for its brokers, carriers, and employees.
View a full list of our programs and submit business with Distinguished.
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