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Vargas Gonzalez Delombard: Advocating for Policyholders in Builder’s Risk Insurance Disputes.

With millions of dollars at stake, policyholders need aggressive legal representation to challenge wrongful claim denials and undervaluation. VGD specializes in holding insurers accountable under Texas law, ensuring that our clients receive the full compensation they deserve for construction-related losses. Contact us today to book your consultation and learn more.

Builder’s Risk Insurance Laws and Policyholder Rights in Texas

Builder’s risk insurance is a specialized policy that provides financial protection for construction projects in Dallas, Texas. These policies are designed to cover losses and damages that may occur during construction, protecting property owners, general contractors, and subcontractors from financial setbacks. Since significant construction projects in Dallas can be worth millions or even billions of dollars, builder’s risk insurance claims often become complex and contentious. Determining the actual value of damages to an ongoing construction project can be challenging, and insurance companies may attempt to minimize payouts or deny claims altogether. Policyholders must ensure they have a thorough understanding of their coverage and legal rights to mitigate potential disputes.

What Builders Risk Insurance Covers

While coverage varies based on policy terms, common perils covered by builder’s risk insurance include the following:

  • Fire
  • Lightning
  • Explosion
  • Wind
  • Hail
  • Theft
  • Vandalism
  • Faulty design
  • Flawed materials
  • Negligent workmanship
  • Labor costs

According to Hartford, standard policies exclude damages caused by flooding, earthquakes, and employee theft unless additional coverage is purchased. Understanding these exclusions is crucial for ensuring adequate protection throughout a construction project.

Common Builder’s Risk Insurance Disputes in Dallas

Builder’s risk insurance claims are often subject to delays, undervaluation, or outright denial by insurers. The most common disputes involve:

  • Claim Denial: Insurance companies may argue that the damage is not covered under the policy or occurred outside the coverage period.
  • Undervalued Claims: Insurers may offer settlements that do not reflect the actual cost of repairing or replacing the damaged property, often relying on undervaluation tactics.
  • Delays in Payouts: Lengthy investigations and negotiations can lead to significant financial strain on construction projects, slowing progress and increasing costs.
  • Coverage Gaps: Policyholders may discover that their insurance does not cover certain damages, such as design flaws or construction defects, leaving them financially vulnerable.
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Reasons Insurance Companies Deny Claims

Insurance companies may deny builders risk insurance claims based on several reasons, including:

  • Damage that occurred after construction was completed
  • Insufficient policy limits to cover the full extent of damage
  • Preexisting damage that occurred before the policy took effect
  • Excluded perils, such as flooding or earthquakes, that were not covered by the policy

In some cases, insurers may act in bad faith by misinterpreting policy language or delaying payments to pressure policyholders into accepting lower settlements.

What Should I Do if My Builder’s Risk Insurance Claim is Denied?

If your builder’s risk insurance claim is denied, the first step is to carefully review your policy and the insurer’s explanation for the denial. Insurance companies often rely on policy exclusions, technicalities, or ambiguous language to justify claim rejections. Understanding the precise reason for the denial can help determine whether it is valid or should be challenged.

Request a Detailed Explanation from the Insurer

If the denial letter lacks sufficient detail, request a written explanation outlining the specific reasons for the rejection.

Review Your Policy

Compare the denial reason against your policy’s coverage terms to identify any inconsistencies or wrongful interpretations by the insurer.

Gather Supporting Evidence

Collect all relevant documentation, including contracts, receipts, photos of damage, expert assessments, and project records to substantiate your claim.

Consult an Experienced Insurance Attorney

If you believe the denial was unjust, seek legal counsel specializing in builder’s risk insurance disputes. A lawyer at VGD can assess your case, negotiate with the insurer, and, if necessary, pursue litigation to recover the compensation you deserve.

File an Appeal or Legal Action

Texas law protects policyholders from bad-faith insurance practices. If negotiations fail, your attorney can escalate the dispute through formal appeals or legal action under the Texas Insurance Code and Deceptive Trade Practices Act.

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How Vargas Gonzalez Delombard Can Help

Texas law provides multiple avenues for policyholders to contest unfair insurance practices. For example, the Texas Insurance Code mandates that insurers handle claims promptly and fairly, while the Deceptive Trade Practices Act protects consumers from fraudulent or misleading practices. 

You may have legal recourse if your builder’s risk claim has been denied or undervalued in Dallas. Working with VGD can help you:

  • Challenge an Unjust Denial: Our attorneys can review your policy and advocate for a fair settlement.
  • Negotiate a Higher Payout: Legal representation can pressure insurers to offer a more accurate valuation of damages.
  • Pursue Litigation if Necessary: If an insurance company acts in bad faith, filing a lawsuit may be necessary to recover damages.

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Trust VGD to Fight for Your Builder’s Risk Insurance Claim

Builder’s risk insurance is essential for protecting construction projects in Dallas, but policyholders frequently face challenges securing fair compensation. The complexities of construction valuations, insurer tactics, and policy exclusions make it critical to seek legal support when disputes arise. Having VGD on your side ensures:

  • Proper documentation and submission of claims to avoid unnecessary delays.
  • Protection against insurance company tactics that aim to minimize payouts.
  • Efficient navigation of the claims process to prevent costly project delays.
  • Legal action against insurers who fail to honor their contractual obligations.

Our legal team has extensive experience handling builder’s risk disputes, including forensic damage assessments, policy interpretation, and aggressive negotiation. We leverage our expertise to secure maximum compensation for our clients and protect their financial interests.

If you are facing an unjust claim denial or undervaluation, don’t wait—consult with VGD today and let us safeguard your investment.

Builder's Risk Insurance FAQ

What is Builder’s Risk Insurance, and Who Needs It?

What Exclusions Are Common in Builder’s Risk Insurance Policies?

How Long Does Builder’s Risk Insurance Coverage Last?

How Much Does Builder’s Risk Insurance Cost in Texas?

Does Builder’s Risk Insurance Cover Construction Delays?

Who is Responsible for Purchasing Builder’s Risk Insurance?

Can I Extend My Builder’s Risk Insurance Policy if My Project is Delayed?

What is Builder’s Risk Insurance, and Who Needs It?

Builder’s risk insurance is a specialized type of property insurance that covers construction projects against physical loss or damage during construction. It is essential for property owners, general contractors, subcontractors, and lenders with a financial interest in a project.

What Exclusions Are Common in Builder’s Risk Insurance Policies?

Standard exclusions in builder’s risk insurance policies include damage from flooding, earthquakes, employee theft, contract disputes, and normal wear and tear. Additional coverage can often be purchased for these exclusions if needed.

How Long Does Builder’s Risk Insurance Coverage Last?

Builder’s risk insurance is a temporary policy that typically lasts for the construction project's duration. Coverage usually ends when the project is completed, the building is occupied, or a Certificate of Occupancy is issued.

How Much Does Builder’s Risk Insurance Cost in Texas?

The builder’s risk insurance cost varies depending on project size, location, construction materials, coverage limits, and policy duration. Generally, premiums range from 1% to 5% of the total construction cost.

Does Builder’s Risk Insurance Cover Construction Delays?

Standard policies do not cover financial losses due to construction delays. However, you can purchase additional coverage for soft costs, such as lost rental income, interest on loans, and other expenses incurred due to covered losses.

Who is Responsible for Purchasing Builder’s Risk Insurance?

The responsibility depends on the terms of the construction contract. Typically, the property owner or general contractor purchases the policy, but subcontractors and lenders may also require coverage.

Can I Extend My Builder’s Risk Insurance Policy if My Project is Delayed?

Yes, most insurers allow policy extensions if the project timeline exceeds the original coverage period. However, you must notify your insurer before the policy expires to request an extension.

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