What is Builder’s Risk Insurance?
Builder’s risk insurance is a temporary policy that protects your home while it’s being built or significantly renovated. It’s designed to cover the materials, structure, and sometimes equipment on-site during the course of construction.
Unlike homeowners insurance, which only applies once the home is complete, builder’s risk provides coverage during the build phase—when your investment is most vulnerable.
Why Is It Important?
Builder’s risk insurance protects your structure and materials from fire, theft and vandalism – things that can really delay or derail your project.
During construction, accidents happen. A builder’s risk policy helps protect against:
- Fire
- Theft of materials or tools
- Vandalism
- Weather damage
What Does Builder’s Risk Not Cover?
While builder’s risk insurance offers broad protection during construction, there are some key exclusions. It typically does not cover:
- Workmanship issues or construction defects
- Injuries on the job site (that’s covered by workers’ comp)
- Floods or earthquakes, unless added by endorsement
- Theft by employees or contractors
- Tools or equipment owned by contractors
Think of it this way: builder’s risk covers the structure and materials—not the people working on the site or the quality of their work.
Do You Need It?
You likely need builder’s risk insurance if:
- You’re building a new home
- You’re undergoing a major renovation
- A mortgage lender is involved
In fact, many lenders require this type of policy before approving funds.
How Long Does It Last?
Builder’s risk coverage is typically written for 3, 6, or 12 months depending on your timeline. It ends once construction is complete and you move to a homeowners policy.
Final Word
If you’re starting construction, don’t assume your homeowners insurance has you covered yet. A builder’s risk policy protects your time, money, and peace of mind from day one.
Want help figuring out the right coverage for your project in North Carolina? Text us today! 828.759.5154