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.

Add Solar Panels to Your Modular Home

You can add solar panels to any of our homes.   Our homes, which already are very energy efficient, will now generate electricity to help you save money and protect the environment.

You can select the solar company of your choice, and The Home Store will work with your provider to make this possible. This is your chance to save for years to come.

Electrical Rates Locked In for 20 Years

Your solar system  will generate its own clean, affordable energy at a lower rate than you’d pay the utility company. In addition to being energy efficient and energy secure, your home will be protected from unpredictable rate hikes. A solar system lets you lock in low, predictable rates no matter how much utility rates rise. Imagine paying $1.11 for a gallon of gas. That’s the price you’d pay if you locked it in 20 years ago! You can’t go back in time, but you can lock in low energy rates now. You can literally watch your savings grow over time.

Green Solar Energy

In addition to the financial advantages you’ll enjoy with your solar system, you’ll also feel pride in knowing you’re helping to protect the environment. Solar power is one of the cleanest sources of energy because it doesn’t emit any greenhouse gases or other pollutants when it’s produced or consumed. Unlike generating electricity from fossil fuels, creating electricity from sunlight slows global warming.

Solar energy is inexhaustible, unlike fossil fuels, so it will never run out. It also provides a measure of energy independence since no one can buy the sun or turn sunlight into a monopoly.

The Home Store's two-story model home with solar panels installed by Tesla Solar.
The Home Store’s two-story model home with solar panels installed by Tesla Solar.

Sleek Mounted Solar Panels

Today’s solar panels are quite attractive. As you can see in the photo of our sales center’s two-story model home, the solar panels sit low to the roof in a sleek, modern appearance that enhances the curb appeal for savvy, energy conscious buyers.

Exclude Oral Representations

Oral Representations Often Lead to Disagreements

Now that Daylight Saving Time has arrived and spring is two weeks away, many customers are ready to start building their home.  Other customers are getting ready to select their modular builder.  With interest rates predicted to rise by June and housing starts to increase to their highest level in several years, getting started soon is a wise move.  Here is some advice about ensuring that your modular home contract includes what you expect.

Experienced modular builders have lots of stories to tell about the types of problems that cause disagreements with their homebuyers.  One type of problem involves misunderstandings about items that were never discussed or documented because one party just assumed what the other party intended.  Another type of problem involves misunderstandings about things that were discussed but not included in the builder’s contract.  It might surprise you that more frustration, anger, and stress are generated by issues that were actually discussed – but not documented in writing – than by those that were not discussed.

These situations typically involve complaints by the homebuyers such as, “I told you I wanted raised panel maple kitchen cabinets and not picture frame maple cabinets.”  The builder might come back with, “Don’t you remember, we did talk about your preference for raised panel maple cabinets, but the additional cost put you over your budget.”  The problem is that the modular builder and homebuyers had talked about this on two occasions, going back and forth about which would be included, but the final contract just said “maple kitchen cabinets” and now both parties remember the discussion differently.

Your contract with a modular home builder should exclude oral representations and instead require that all details be documented in writing.
Your contract with a modular home builder should exclude oral representations and instead require that all details be documented in writing.

The Cost of Relying on Oral Representations

The cost difference between the picture frame and raised panel maple cabinets would be substantial enough on its own.  But usually this misunderstanding doesn’t get discovered until the cabinets are already purchased and at least partially installed.  It will cost either the homebuyer or builder (or both) a bit of money to make the change.  The alternative is no better.  If the homebuyers accept the picture frame cabinets, they will likely be unhappy with their modular builder and forever disappointed in their kitchen.  The relationship between the two parties will now be fractured by distrust, which will make it more likely that small disagreements will become antagonistic.

Agree to Make Oral Representations Null and Void

The last thing you want to do is to rely on your modular builder’s or your own memory of what you’re getting.  That’s why it is better for modular builders to include a clause in their contract that states that “It is mutually agreed that any oral representation made by either party prior to the signing of this agreement is null and void.”  This clause serves to limit and place boundaries around the scope of either party’s representations and warranties.   Even if an item is discussed and agreed to verbally, it has no legal validity unless it’s documented in the contract.

Replace Oral Representations with Detailed Written Representations

My suggestion is that you share responsibility with your modular builder for documenting all the details by taking notes during your meetings.  You should be concerned if your builder is not also taking notes.  If you then compare your notes with the builder’s contract, you are more likely to avoid contentious and costly disagreements.

For more information about oral representations in your contract with your modular home builder, see Selecting a Modular Home Dealer and Selecting a General Contractor in 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.

Rain Gutters Will Protect Your Modular Home

Purpose of Rain Gutters        

Many people think the main purpose of rain gutters is to protect the side of their home.  Actually its to protect their home’s foundation by channeling water away from the foundation.  Otherwise water running directly off the roof will dig a ditch along the sides of the foundation, and as the water soaks into the ground, some of the water will work its way through the foundation.  If you choose not to install gutters, the excavator must take extra care to grade your property so all sides slope away from your modular home.  Keep in mind that this solution isn’t as effective as installing rain gutters.
It’s also true that gutters are helpful with protecting the exterior of your modular home from back-splash stain and rot.  In addition, they help shield your landscaping and reduce ground erosion.  Most importantly, gutters shield windows and doors from water infiltration as well as family and guests from being soaked while entering your home.  Gutters are especially helpful for preventing leaks around the thresholds of exterior doors during heavy storms.  Without gutters, the exterior doors will be pounded with rain falling off the roof as well as from the sky.  In such circumstances, the doors will be prone to leak.
In fact, the reason I decided to write about rain gutters is that two of the problems we’ve had from time-to-time have been with homes that did not have gutters because the homeowners wanted to save money.  For sure, gutters are costly.  But homes without them are much more likely to have a leaky exterior door or a damp basement or both.  Since such leaks are not due to a defect in the exterior doors or foundation, they’re not a warranty claim.

The 44' long gutters on the front of our two-story model home are seamless.
The 44′ long gutters on the front of our two-story model home are seamless.

Rain Gutter Material

Gutters are available in four materials:  vinyl, steel, aluminum, and copper.  Each material has its pros and cons for your home.
Vinyl gutters are lightweight, the easiest to install for do-it-yourselfers, and the least expensive.  They come in a variety of colors, and since their color is part of the material, they hold it well.  Another advantage of vinyl gutters is that they won’t chip, dent, or corrode.  However, they can become brittle in extreme cold.
Steel gutters are the sturdiest, which enables them to support ladders and falling branches without damage.  On the other hand they require the most maintenance and can rust if water doesn’t drain properly.
Aluminum gutters are very popular because they won’t rust.  However, they can dent and bend from too much weight, powerful winds, or falling debris.  This is most likely to happen if the gutters are fabricated out of secondary aluminum, which is made mostly of recycled materials, rather than primary aluminum, which is of a higher quality and thicker.
Copper gutters are usually reserved for classic restorations. They’re very attractive, durable, never rust, and never need painting.  During their 75+ year life-time they will oxidize to an attractive green.  On the other hand, copper gutters are the most expensive, which also makes them a target for thieves.

Seamless vs. Sectional Rain Gutters

There are two types of gutters, sectional and seamless.  Sectional gutters are built out of pre-cut pieces that are joined and fastened together as they are installed.  Seamless gutters are created on site using single lengths of gutter that are as long as can be functionally installed.  This eliminates the number of joints that need to be fastened together, usually only at inside and outside corners and downspouts.  Since gutters most frequently fail at the joints and seams, seamless gutters virtually eliminate this problem

Gutters need to be cleaned regularly to prevent them from clogging with debris, which can cause damage to your home.
Gutters need to be cleaned regularly to prevent them from clogging with debris, which can cause damage to your home.

Rain Gutter Maintenance and Repair

Gutters must be maintained regularly to remove leaves and other debris, since these materials will back up the flow of water.  When this happens the gutters will no longer protect the house.  In fact, the overflow can damage the roof and encourage the formation of more ice dams than if you didn’t have gutters.  An option is to use “gutter guards”, which are designed to keep debris out but allow water to enter.  Although these reduce the need for frequent cleaning, it’s still wise to inspect your gutters regularly.
You should also regularly examine whether your gutters are fully attached to your house.  Gutters can pull away from the roof over time due to the weight of snow, ice, branches, and small animals.  Checking for holes and leaks where gutter sections connect is another homeowner responsibility for maintaining well-functioning gutters.
For more information about rain gutters, see Modular Home Specifications and Features and The General Contractor’s Responsibilities for Building a Modular Home in my book The Modular Home.