Yes. Ensuring a barndominium is possible. Most insurance companies that offer home insurance will have a separate policy for barndominiums as well.
Keep in mind that because barndominiums are often custom-designed to appeal to the homeowner and are unique in their build, insurance policies for barndominiums vary. This is especially true if you are planning to use it for dual purposes.
A dual-role construction is a single building that functions for multiple purposes. A barndominium is most often a dual-role construction with one area for living and another for storage or business purposes.
Sometimes insurance companies will not insure a dual-role construction. Come prepared to discuss the percentages of living space and miscellaneous space with your insurance agent.
Is Insuring a Barndominium Easy?
Depending on your property location and credit history, getting insurance for a barndominium could be easy or come with some hoops that need jumping through.
Just like any kind of rural housing or new construction, before breaking ground on your barndominium, double-check that you meet the requirements for insurance eligibility. Be sure to share the details about your property with your insurance agent so that they can best help you find coverage suited to your needs.
Some questions that you may be asked by your insurance company include:
- Can your barndominium be seen by neighbors?
- What strategies are in close range for fire safety? Such as the nearest fire hydrant or station.
- What percentage of your barndominiums is for living space? What percentage of space is for work, storage, or other?
- Is your barndominium going to be your place of business?
- What is the infrastructure for electrical and plumbing? Is everything done up to code?
Do I Need Barndominium Insurance?
Yes, you do need barndominium insurance. Barndominiums have the benefit of having a work or storage space close to your living space. What this means though, is that if disaster strikes, you could lose both your office and home in one fell swoop.
Insurance is there to cover you if your barndominium faces damages or needs unexpected repairs. Just like you would get home insurance and insurance for office spaces, a barndominium should absolutely be insured. Below we have highlighted some common types of insurance policies for barndominiums.
Types of Barndominium Insurance
So, you need barndominiums insurance, but what kind of insurance is best for your barndominium? The answer to this will depend on several factors: its value, how you use it, where it is located, and how up to code it was constructed. As with any insurance policy, what kind of coverage they offer will vary based on the policy.
As a bare minimum, you should ensure that your insurance policy covers costs related to:
- Interior or Exterior damage
- Damages to the structure
- Contents Coverage
- Injuries incurred because of damage to the structure
Insurance policies usually include coverage for repairs due to damages from vandalism, tornadoes, fires, or electrical failure.
Actual Cash Value
Actual cash value insurance does not cover the total cost of damages incurred. Instead, the insurance company will calculate the cost of repairs and deduct the value of depreciation from what they payout. Actual cash value insurance does not cover the cost of rebuilding your barndominium.
If you opt for this type of insurance, it is because you do not anticipate the value of your property or contents inside to increase before you plan on vacating the property.
Extended Replacement Insurance
Extended replacement barndominium insurance covers your home, its contents, and provides coverage for rebuilding.
Extended Replacement Insurance or extended value insurance is more costly than the actual cash value option because it offers more coverage and protection. This insurance policy includes coverage for costs incurred for renting an alternative living space while repairs are being performed, as well as covers the costs of those repairs.
If you are likely to be in your barndominiums for a long time, this is the better insurance option for you.
Interim Construction Loans
An interim construction loan is another way to protect yourself when constructing a barndominium.
While not technically an insurance policy, an interim construction loan is a loan given at scheduled times to pay for varying stages of construction. It helps to make the construction process go smoother and cover yourself in case of any last-minute adjustments to the design.
Even if you have the necessary cash available for your project, an interim construction loan ensures that all payments are made at the required times. Should there be any unexpected price increases due to changes in design or material, which is common in new custom-designed builds, you will be covered financially.
If you are considering insuring a barndominium, the best thing to do is to shop around and compare insurance policies. Ask questions and be honest about the details of your barndominium with your insurance agent.
Barndominium insurance can be hard to navigate, but once you find the coverage and policy that’s right for you, the peace of mind it brings is well worth the effort.