Every property needs insurance coverage whether it's still under construction or the construction is complete. However, the insurance needs of a home under construction are markedly different from that of a standing house. If you have insured your house during the construction phase (and you should), you will need to upgrade to or buy new homeowners insurance after construction is done. Here are three major reasons this is necessary:

The Builders Risk Insurance Will Expire

Building contractors use builders risk insurance to protect themselves during the construction phase. The coverage comes in different forms depending on the protections offered. For example, builders risk coverage may cover the half-built house, the materials on the site, the construction tools. The coverage also protects the contractor from lawsuits that may be filed by those who may be injured on the site. However, this coverage expires when the contractor is done with their work, so you will need to buy your own coverage for the relevant risks.

You Will Need To Protect Your House Contents

A home under construction usually is devoid of the usual contents found in homes such as furniture and electronics. Therefore, you don't need to buy insurance for your home contents during the construction phase. However, you need the coverage immediately the construction is done and you have started to move your belongings into the property.

You May Need Landlord's Insurance

If you were constructing the house to rent it out for income, then there is another form of coverage you will need after its completion that you had no use for during the construction – landlords insurance. This coverage protects you from financial loss that you may experience if your rental property is damaged. For example, if fire razes your property, you will need money to build it and you will lose money because your renters may have to move out during the reconstruction. You will have to shoulder that entire burden if you don't have landlords insurance, so you need to buy the coverage if the construction is complete and you are ready to start accepting renters.

As you can see, you can't rely on the same coverage you had during the construction phase if your property is complete. If you do that, you may find yourself with a huge bill to settle if something happens to the property and it's not covered. Therefore, when the construction is nearing completion, talk to an insurance agent about upgrading the coverage as necessary.