Construction Insurance for Building a Modular Home

Why You Need Construction Insurance

Here’s a risky way to save money building a modular home.  Select a modular dealer and contractors who are not properly insured.

Imagine that a neighbor’s child is seriously hurt when he falls into your cellar hole before your modules are set on the foundation. Imagine that one of the trucks delivering your modules strikes your neighbor’s car causing serious damage.  What if the crane company drops one of your modules rendering it unusable? What if a member of the set crew is seriously injured or killed when he falls from your roof?  Or what if the plumber fails to securely connect a pipe, which causes severe water damage before the leak is discovered?

Accidents and mistakes can happen when building a home, regardless of the type of construction. Since the right insurance can mitigate the damages, you need to ensure you’re thoroughly covered.

Require Everyone to Obtain Construction Insurance

This is best done by requiring everyone involved in building your home to have insurance. (Here’s a previous blog that elaborates on the insurance you need.) Making this a requirement won’t prevent disagreements about who is responsible for coverage, but it will increase the likelihood that one or more of the insurers will take on this responsibility, which is a lot better than you being saddled with the liability.

Don't forget to obtain proof from everyone working on your modular home that they have proper construction insurance.
Don’t forget to obtain proof from everyone working on your modular home that they have proper construction insurance.

Verify Construction Insurance Coverage

Making insurance a requirement, however, isn’t enough. You need to verify that each party has a current policy with sufficient coverage. To do this you need to insist on receiving a “certificate of insurance” directly from each party’s insurance agent. Getting a copy of the certificate directly from the insurance agent will protect you against being duped by a dealer or contractor whose policy has run out, since it is not difficult for someone to doctor a photocopy of an expired certificate.  You might be surprised how often this happens, mostly because builder insurance is expensive. There will be no sympathy from the insurance company, however, if you file a claim against a policy that was not renewed. After receiving the certificates, you should ask your own agent to review the coverage. They should be able to determine if the coverage includes sufficient liability insurance and workers compensation insurance.

Secure Your Own Construction Insurance

Since you need to have coverage from everyone working directly on your project, you also need to follow the same procedure with any subcontractors you directly hire. In addition, you should obtain either a “builder’s risk” policy or its equivalent for yourself, since this will provide better coverage against theft and vandalism than an ordinary homeowner’s policy.

For more information about modular home construction insurance during its construction, see  Selecting a Modular Home Dealer, Selecting a General Contractor, and Financing a Modular Home in my book The Modular Home.

Modular Home Checklists

There are many things to learn the first time you build a modular home.  But if you’re like most homebuyers, you won’t get the full benefit of what you learn, since you’ll likely only build one home.
But you can benefit from what I’ve learned over twenty-eight years building more than 1,200 homes.  To start with you can read my book, The Modular Home, which gathers all this information in one place.

Use these modular home checklists to guide you through the process of building a modular home.
Use these modular home checklists to guide you through the process of building a modular home.

Take Advantage of My Experience by Using My Modular Home Checklists

Of course, it’s hard to use a book efficiently the first time you use the information.  That’s why I’ve created several checklists that cover the most important steps.  Below is a link to each of the checklists.  There’s also a link to this list on the home page of The Home Store’s website.  I hope you find these modular home checklists helpful.

  1. Ensure You Are Ready Willing and Able to Build a Modular Home
  2. Selecting a Modular Home Dealer
  3. Your Modular Home Dealer Customer References
  4. Selecting a Modular Home General Contractor
  5. Your Modular Home General Contractor References
  6. What to Include in Your Modular Home Legalese
  7. Selecting the Right Modular Home Plan
  8. What You Should Ask Modular Home General Contractors
  9. Reviewing Your Modular Home Floor Plans
  10. Reviewing Your Modular Home Elevation Plans
  11. Modular Additions
  12. Building a Universal Design Modular Home
  13. What Your Modular Manufacturer Needs from Your Contractor
  14. How to Air Seal a Modular Home
  15. Making an Offer To Purchase for a Building Lot
  16. Your Municipal Water and Sewer Connections
  17. Reviewing Your Modular Construction Drawings
  18. Potential Permits and Supporting Documents
  19. Your Modular Dealer and Financing Tasks
  20. Your Permit and General Contracting Tasks
  21. Omitting Materials from the Modular Manufacturer

For more information about all the topics covered in the checklists, see my book The Modular Home.

Building in the Winter

Protect the Ground When Building in the Winter

If you are building in the winter months in a region that requires protection against frost and snow, your general contractor should take some steps to reduce the impact of his work. He should blanket the areas he will be excavating before the work begins to minimize frost penetration. This might be done, for example, by covering the ground with hay. The excavated areas should stay blanketed until they are backfilled.

There are several extra steps to take when building in the winter.
There are several extra steps to take when building in the winter.

Keep the Access to Your Property Clear When Building in the Winter

The access to your site must be kept free of snow and ice. Even though bulldozers can move mountains, their tracks will just spin if they attempt to pull any substantial weight on ice. All snow and icy areas, even small light patches, must be plowed and sanded just prior to delivery. If it snows after the foundation is poured but before the home is set, the GC should remove as much of the snow as possible from the basement before the set. This is often easier said than done, however, and sometimes it’s impractical, especially when the slab has not already been poured.
You and your GC will need an agreement about who is responsible for snow plowing, shoveling, and sanding while your home is under construction. Since neither of you will know what the winter will bring in any given year, an allowance, with a reasonable rate per snowfall or per hour, is a fair way to handle it.
If your home will be delivered in the winter, try to have the foundation installed in the fall. The GC should then protect the foundation from the frost.

Take Precautions Pouring the Concrete Floor When Building in the Winter

When building in the winter in a cold climate, the GC should try to pour the floor before the temperature drops below freezing, as long as he can also protect it from the frost. If this cannot be accomplished, and the floor will be poured after the house is set on the foundation, the area must be covered with hay or in some other way protected from freezing immediately after the hole is dug. Any frost that remains after the house is set must be removed by heating the basement before the foundation floor is poured. Otherwise, the floor may crack substantially. If extensive frost or snow must be removed by heating the basement after the house is set, extra caution should be taken to prevent the house from absorbing the moisture.

Get the Heat Going When Building in the Winter

Contractors are less productive when they are cold, and many construction tasks, such as taping and painting drywall, cannot be done until a home is reasonably warm. Consequently, if you are building in the winter, the GC will need to get the heating system up and running quickly. He will be delayed, however, if the heating system is going in the basement and the slab cannot be poured because of frost. The installation will also be delayed if the electrical power is not immediately available. In these circumstances, the GC will need to supply temporary heat, which is more costly and less effective.
If you live in a climate with cold winters, you may want the contractor to add antifreeze to the heat loop. You should do this if you are away from home in the winter or if you have a drive-under garage, since leaving the door open on a cold day can cause the pipes to freeze.
If you are building during the spring, find out whether your community allows heavy equipment to travel on the roads during the spring thaw.
For more about building in the winter, see The General Contractor’s Responsibilities for Building a Modular Home in my book The Modular Home.

Trash Removal

Trash Removal after Set Day

After the set, the site will have piles of plastic wrap that were removed from the modules.  The quantity of material almost always surprises customers and GCs without modular experience. The GC should dispose of all the material left over from the set immediately after it is completed.
In addition to the pile of trash created on set day, the button-up phase and construction of site-built structures will generate trash daily. Therefore, it is usually best if the GC uses a large dumpster to dispose of the trash.  If the site does not have room for a dumpster on set day, the GC can have one delivered the following day.

The best option for managing trash removal on the site is to use a dumpster.
The best option for managing trash removal on the site is to use a dumpster.

The GC may decide instead to use a truck or van to carry the waste from the site. In that case, he should provide a container or at least designate a location for everyone to place their trash. This can work as long as the GC regularly removes the trash; if he does not, your new neighbors may find trash being blown into their yards. You would probably prefer to get to know them under different circumstances.

Trash Removal when Packing to Move    

As you pack your belongings while preparing to move, you will undoubtedly generate a lot of trash. Resist the urge to use your GC’s dumpster. Even though you are paying for it, the GC needs all the room he can get for the construction debris. In addition, if your contribution fills the dumpster prematurely, you may receive a bill for an additional dumpster, which will cost a lot more than the extra time it would have taken you to use the town’s disposal services.
For more about trash removal, see The General Contractor’s Responsibilities for Building a Modular Home in my book The Modular Home.

Modular Home Delivery Challenges

Modular Home Delivery Challenges         

A road sign indicating a winding road ahead for the next 5 miles
The dealer should confirm the modular home delivery route.

Although most building sites can take delivery of a modular home, there are some locations that require enough extra site work or a redesign of the house plan into smaller modules that building a modular home is not practical. Narrow approaching roads with hairpin turns, lots on the side of steep hills, and very narrow properties can pose challenges. The only way to know if a building lot can comfortably receive a modular home delivery is to have a modular dealer visit it.
But sometimes that’s not enough.  A few years ago we delivered a two-story home to an “easy” lot.  It was flat, wide, and deep with no trees to obstruct either the delivery or set.  The roads to the property were also straight and wide enough. Or at least they were when we completed our inspection of the route.
A week before delivery we were informed by the customer that our planned route had been closed by the town for six weeks to complete some emergency work to the sewer and water pipes. We immediately revisited the site and searched for an alternative route.  Fortunately there was one option, but unfortunately it required us to cross a very old, narrow wooden bridge that wasn’t rated to carry the weight of the modules.

Modular Home Delivery Backup Routes

We ultimately decided to use a very large crane to lift each module plus its carrier from one side of the bridge to the other. Ever since then we’ve always made sure to look for a back-up route to the property. However, we’ve not always been able to find a viable alternative.  Usually there is more than one route for a car, but the alternatives aren’t always wide or straight enough to handle the size of the modules.  Whenever we have any concern about the primary or backup routes, we talk to the town public works department to make sure they aren’t planning to close the road around the time of the scheduled delivery.
For more information about the modular home delivery, see The General Contractor’s Responsibilities for Building a Modular Home in my book The Modular Home.