Reply To: Builder’s risk insurance


Typically lenders require either a homeowners policy or a builders risk policy for a construction loan. Most lenders require that the coverage be in place at the time of closing. Some lenders do not require the coverage until construction actually begins. The amount of the premiums should be included in the Other Costs on the LE and the CD. The amount required to be paid at or before closing are included in Section F. – Prepaids. If the premiums for future periods are escrowed, the initial amount placed in the escrow is reflected in Section G. Premiums for insurance purchased after closing do not need to be disclosed on the LE or on the CD, but can be shown in an separate addendum attached to the LE or the CD.