Ecuador, in addition to being known for its magical tourist destinations, gastronomy, and unique flora and fauna, is also known for being within the Pacific Ring of Fire. This means that seismic activity is something to consider before striking ground and building a house in Ecuador. Additionally, you should consider who you will hire for the execution of your work and what guarantees this builder offers you. The quality of work and type of construction policy you agree upon will make a difference!
A good construction policy will allow the building process to be easy and simple, since your house will be insured from its foundation all the way through the construction process until the delivery of the house. A construction policy guarantees that in the event of any natural or seismic event, the foundation will be insured and you will not lose the money you have invested in building the property. When buying a construction policy, the insurance company will start by verifying that the chosen builder is reputable. This builder must have experience building similar properties and no history of failed constructions. Many companies will not be able to insure you if the builder does not meet these requirements as the work of the builder cannot be guaranteed. In terms of coverage, if your house is in the middle of construction and suddenly an earthquake fractures a column or one of the walls, the company will carry out an inspection to verify the reasons for this fracture and the expert will determine the amount to compensate you for the reported damage. In the case that it is necessary to tear down everything and rebuild, this expense will also be covered by the insurance company.
Coverages for policies vary, but the most important things to consider are the following:
All risk for material damage
Damage from earthquakes, tremors, tidal waves, or volcanic eruptions
Damage from cyclones, hurricanes, storms, winds, floods, sinkholes/cave-ins, and landslides
Damage caused directly by the contractor during maintenance
Non-contractual civil liability for damages to third parties related to construction
Non-contractual civil liability for bodily injuries caused to unrelated third parties
Debris removal expenses
In addition, this coverage extends to the machinery contracted for civil works, the assembly of equipment necessary for the work, the machinery and equipment of contractors within the work (includes temporary constructions), and civil liability for damages to third parties, among other things that will be of great help in any unforeseen event.
Now, the requirements for contracting this insurance could vary depending on the company you choose, but generally the first thing that one is required to do is request a quote by detailing the construction project you would like to be insured. The following is usually needed when requesting:
The contractor (experience in similar projects or works)
The work (type of construction, characteristics, description, plans)
Duration of the work
Planning of the work
Based on the analysis of the information, the executive may contact the client for additional information on the project to be insured (if necessary) or in turn to visit the facilities with engineering personnel.
This policy, among its many benefits and coverages, also includes contract restrictions that allow both parties to manage the entire process in a transparent manner, some of the restrictions are:
Negligence of the insured or constructor
War, riot, strike
Wear, deterioration, rust
Damage suffered during transport
Loss or damage due to miscalculation
Electrical or mechanical damage to construction equipment and machinery (external damage caused if covered)
Penalties for breach of contract
Shortages in inventories
Pre-existing damage or defects
Money, securities, plans and documents are not insured
A construction policy is undoubtedly something to consider if you are about to start a new project. Sometimes overconfidence leads us to forget unforeseen dangers, such as an earthquake, which are common on the coast of Ecuador. We recommend that you ask for several construction options before carrying out your projects and never make a payment or exchange money before a contract is signed. Additionally, never make a payment without written proof that the payment has been made. Unfortunately, cases like this have occurred and the courts have sided with construction companies and builders as not receiving their fair payment due to lack of proof. It is also important to consider the type of neighbors that you are going to have in your area and what security you would like for your home and neighborhood. Verify that the land you have chosen is in a location without conflicts and without legal construction problems. These are some important considerations before executing your work and if it is already in process, we wish you luck and remind you that construction insurance is an intangible life-saver.
Once your new house is completed by the builder you will be able to insure it with an all-risk policy that will cover it, and everything inside it, from the day you move in!
Remember it is better to have insurance and not need it than to need it and not have it.
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