"Where to Buy Mechanic's Lien Insurance"

[perryrip]

Alan, Denise,

I'm closing in on having a home contracted to be built in Coastal GA. The contractor I am leaning toward is very reputable, and quality oriented, but a small volume builder. I want to buy mechanic's lien insurance, but my calls to several banks (BOA is one of them)that I am looking at for financing don't seem to know what I'm talking about or offer this product. You mention this as a product available on pages 38 and 39 of your 3rd Edition, yet I can't find anything about it being available.Do you know of any recommended sources that I could go to for purchasing this protection?
Thanks.

perryrip

[dawell0]

We have it (thank God) for our building project. We are having problems so we are glad to have it.

We got it through our insurance company (Grange insurance) as part of the homeowner's policy. Our lender required it. There is also builder's risk insurance which protects against people stealing from the job site. If you are with a small builder, I certainly recommend it. Even after doing a lot of the checks that the book suggested, we STILL had problems and now we have an attorney trying to straighten the situation out.

[perryrip]

Dawell0,

Thanks very much. I've talked to everyone I can think of in GA and no one is aware of this as a product. I'll check with my current homeowners insurance to see what they know. Can you send me contact info for Grange Insurance?
Thanks.

Perryrip

[perryrip]

dawell0,

Just a follow up. I called the local Grange insurance agent here near where I live and he didn't have a clue what I was talking about and doesn't think they offer the product. If you can provide me with your agent info I could at least talk to someone that can tell me more about it and how much I may expect to pay. Thanks.

perryrip

[perryrip]

dawell0,

Just a follow up. I called the local Grange insurance agent here near where I live and he didn't have a clue what I was talking about and doesn't think they offer the product. If you can provide me with your agent info I could at least talk to someone that can tell me more about it and how much I may expect to pay. Thanks.

perryrip

[dawell0]

I don't have my policy info here, but I will try and see if I can get that for you later. Our lender required it in Ohio. I do know (my husband works in insurance) that it is different from state to state. We have homeowners insurance that includes builders risk and mechanics lien. For a $300,000 house, it was about $700 per year. Have you checked to see if Georgia has a law that prevents the problem? I know that Ohio has several laws that prevent mechanics liens from being put on your property without your notice. I have 2 of them now, but both had my notice.

[perryrip]

I'm pretty sure GA doesn't have a law that prevents this problem based on my questioning of several insurance agencies, and title companies. If you can send me your insurance contact info, I'd still like to talk with them and see if they would offer it in GA.
Thanks again.

perryrip

[dawell0]

I didn't forget about you, but I was checking into the issue more (to see about Georgia if I can). I'll let you know in the next few days what I find out.

[perryrip]

dawell0,

Thanks. I appreciate any info you can provide.

perryrip

[dawell0]

I guess that I can't help you as much as I thought. Because of the OH law, we have the mechanic's lien insurance but we don't. It covers if we pay the contractor and they don't pay the subs, mostly by providing legal assistance since the law is on the side of the consumer. Our law states that the consumer is not required to pay twice for work, if the contractor never pays the subs. The subs have the option of putting liens on the property, but the contractor is responsible and you can sue for damages, slander of title, etc in this state. I don't believe that you have the same law in Georgia, but I was having trouble finding legal info for GA. Because of this, we have the insurance with our regular homeowners policy which we needed for building the house (per our lender). That's why they have it here in OH with Grange, but you were having trouble getting them in GA; it's not really a policy so to speak.

You may want to check on adding with a title insurance policy, since it is related to the title. We got title insurance on the land and the house (in case you build on land that someone tries to claim later, they can have claim to your house); this we got through a lawyer in town (Ohio Bar Association, so I know you can't get that policy). I'm going to check with another company in Kentucky to see what they do about mechanics lien insurance because I know that the law doesn't hold in KY.

GOOD LUCK! Sorry that I cannot help more.