Guide · Builders Risk
Builders risk vs. homeowners insurance.
Builders risk and homeowners insurance are not two products you choose between. They are two policies for two phases of the same home: builders risk while it is being built, homeowners once you live in it. The mistake is assuming one of them covers a phase it was never written for, and finding the gap at the worst time.
Logan Kroloff
Licensed Insurance Agent
Most of those gaps sit inside the timeline. One sits outside it, in coverage neither policy provides.
The homeowners gap
Why homeowners stops at the job site.
A homeowners policy is built around a finished, occupied residence. Its language assumes a house someone lives in, and the coverage quietly depends on that being true. A home under construction is neither finished nor occupied, and that plays out two different ways depending on how you got there.
New construction. There is no homeowners policy on a house that does not exist yet. Some carriers will extend a dwelling-under-construction endorsement onto a homeowners or dwelling policy, but for a custom build it is thin coverage geared to an ordinary house, not the course-of-construction protection a multimillion-dollar project needs. The structure being built is builders risk territory from the first day.
Renovation in place. Here you already carry a homeowners policy, which is what makes it dangerous, because it feels like coverage. But standard homeowners forms restrict coverage on a home left vacant, and a vacancy provision can suspend protection against vandalism, water damage, and more once the house empties out for the work, often after a set number of days. Pull the walls down on a home you moved out of, and the policy you are still paying for may not answer the claim you expected.
The liability gap
Property is not liability.
There is a second gap, and it is the one people miss even with both policies in place. Builders risk is property coverage. It pays for physical damage to the project. It does not cover liability.
If a delivery driver is hurt on the site, or the excavation undermines a neighbor's foundation, that is a liability claim, and builders risk does not touch it. Liability during construction usually falls to the general contractor's commercial general liability, sometimes to an owner's policy or a wrap arranged for the project. Your homeowners liability may not extend to an active job site, and often will not. So carrying builders risk and homeowners does not by itself mean the liability side of the build is handled. Confirm who holds it before the first crew shows up.
The seam
The handoff.
How the two policies meet depends on the project you are running, but every build ends the same way, with a handoff. That seam is the sharpest risk. Builders risk ends at completion or occupancy. Homeowners has to be in force the day you take the house. Those two dates have to meet exactly, and they are set by two different processes: your builder's schedule on one side, your binding date on the other.
Miss the seam and you get a window with no coverage over a finished, uninsured house, or a builders risk policy that has already terminated because you moved a bed in before the homeowners policy was bound. Occupancy is the trigger that catches people, because moving in even partially can end the builders risk policy whether or not you meant it to. How builders risk works covers that endpoint in detail. The fix is coordination: set the homeowners bind date to the real occupancy date, not the optimistic one, and hold the builders risk term until the handoff is done.
Renovations
When both run at once.
A renovation adds an overlap before that handoff. If you are renovating a home you still hold a policy on, that homeowners policy stays in force, but curtailed by the same vacancy provisions, so it cannot be what covers the structure while the work runs. That falls to builders risk, sized to include the standing structure, not just the addition, so the house you already owned is not the uninsured half of your own project.
Which value goes inside the limit is the sizing question. How much builders risk you need works through it. When the work is done, the same handoff applies: the builders risk term closes and homeowners takes the whole house.
The short version
Two policies, one handoff.
Homeowners covers the home you live in. Builders risk covers the home you are building, and the phase homeowners was never written for. Neither one covers liability on the job site by itself. And the moment that decides whether you have a gap is the handoff between them, which is a date to coordinate, not a formality to assume.
Where this connects
From handoff, to size, to price.
The sizing question is how much builders risk you need. The pricing question is what builders risk costs.
Common questions
On the two policies, specifically.
Coordinate the coverage around your build.
Tell us about the project, the existing coverage, and the occupancy date. A licensed advisor will structure builders risk and the homeowners handoff so there is no gap at completion.