I had the same problem with a hangar in Hawaii.  They wanted full
liability insurance even while I was just building the airframe.
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===>  Hi David.  I also had to have builders coverage, even though the plane
was at my house, and not the hanger.  Avemco was happy to provide $300k of
liability for only $128 a year.  I even have a renewal for that policy in
hand.  I consider renewal of this policy as one of the better fallback
plans, though it still isn't right.  I'm sure they mean that you have to
have a liability policy for each aircraft, but I'm not sure it was stated
that way in the lease.  If not, I could always keep a cheap builders policy
active on some eternal project. Again, not right.  

It's frustrating to think that I could bolt on a junkyard Lycoming at twice
the TBO and get insurance from anyone, but my new rotary can't be insured at
any price. I'll keep hammering on the insurance companies, and report my
progress, or lack thereof.

Thanks,
Rusty (on the lookout for a new airport)