What coverage plan should a producer recommend for a contractor who constructs a rental property using non-standard building materials but wants as much coverage as possible?

For a contractor constructing a rental property using non-standard building materials, the best course of action must consider the specific coverage needs and limitations with regard to those materials. Rental properties constructed with non-standard materials may not be adequately covered under standard homeowners insurance policies.

Typically, homeowners’ policies like HO-2 and HO-5 provide varying levels of coverage for personal property and structures, but they are primarily designed for owner-occupied residences. An HO-4 is designed specifically for renters and would not apply to a contractor's needs since it is intended for non-owners.

When dealing with non-standard building materials, insurers may have restrictions on coverage availability due to the increased risks associated with those materials. Therefore, the contractor's desire for maximum coverage could be hindered by the nature of the property. This circumstance often results in the conclusion that standard policies cannot be extended to cover the structure adequately.

In this case, the appropriate recommendation would be that coverage cannot be extended on this structure. This addresses the specific risks and coverage challenges posed by using non-standard materials in the construction of the rental property.