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To: RealMuLan who wrote (54324)	8/4/2006 3:27:30 PM
From: Elroy Jetson	Respond to of 116555

"Builders Risk Insurance" is like a "home owners insurance" for projects under construction. Smaller builders carry this insurance while most larger builders do not as they are self-insured. "Builders Risk Insurance" covers the builder if the project under construction burns down and similar risks. But this type of insurance doesn't provide any help against rising costs, nor does it provide any help in a housing downturn. Neither "Builders Risk Insurance" nor "home owners insurance" covers losses incurred due to a decline in prices. "Builders Risk Insurance" never covers land inventory where no construction is being performed. As land prices fall, the asset value of home builders will decline rapidly and there is no insurance for this. The Book Value of these firms will likely remain constant, but this won't help them when they are dealing with lenders, who will want to see current values for assets. .