Do You Need Homeowners Insurance During Construction?

Your standard homeowners policy won't cover your home during construction. You need builder's risk insurance for new builds or a dwelling under construction endorsement for renovations.

Find out if you're overpaying for homeowners insurance below.

Written by Mark Fitzpatrick

Updated: July 13, 2026

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Key Takeaways

Standard homeowners insurance won't cover your home during active construction, so you need separate coverage in place before work begins.

Builder's risk insurance covers new builds and long projects; a dwelling under construction endorsement covers shorter renovations where you stay in the home.

Talk to your insurer before construction starts to avoid gaps in coverage.

Homeowners Insurance While Under Construction

Standard homeowners insurance covers a finished, occupied home. It doesn't cover a home being built or renovated, and most policies stop covering a home once it sits empty for 30 to 60 days in a row. That leaves you without coverage for theft, weather damage or injuries on your property during construction.

The vacancy clause is where most homeowners discover the gap — not at the start of the project, but in the middle of it. Moving out for a renovation can trigger it before the first wall comes down. Most homeowners assume the policy stays active as long as the premium is paid. Check your policy's vacancy definition before you move out, not after.

COVERAGE MAY DIFFER IF YOU STAY IN THE HOME DURING RENOVATIONS

Staying in your home during a renovation lowers your risk in the eyes of your insurer. But major structural changes or projects that run longer than six months still need added coverage, even if you stay. Tell your insurer whether you'll be home before work starts.

Dwelling Under Construction Endorsement

A dwelling under construction endorsement adds short-term coverage to your existing homeowners policy. It covers theft and damage from fire, wind and vandalism during a renovation. Most endorsements run 90 to 180 days.

In our research on construction endorsements, the 90-day limit is where this coverage most often fails. Renovation projects run long, and the endorsement doesn't send a reminder when it expires. If you hit the expiration date without contacting your insurer, the home sits without coverage from that point forward, often without the owner realizing it until a claim gets denied. For projects that might run long, set a calendar reminder for two weeks before the endorsement expires.

When to Get A Dwelling Under Construction Endorsement

Choose a dwelling under construction endorsement if:

Your project finishes within six months
You'll live in the home throughout the renovation
The work is limited to specific rooms, such as a kitchen or bathroom

Don't choose a dwelling under construction endorsement if:

Your project will take longer than six months. Most endorsements expire before long projects finish, leaving you with no coverage.
You're moving out during construction. An empty home has higher theft risk and needs different coverage.
You're building from the ground up or doing a full-house renovation. Endorsements add to an existing policy on an existing home and aren't built for projects that start from scratch.

Dwelling Under Construction Endorsement: What it Covers

A dwelling under construction endorsement may include the following protections. Coverage varies by insurer, so check your policy before assuming any of these apply.

Structural Damage
Covers damage to your existing home and new additions from fire, wind, vandalism and other named perils. These are the same risks your base policy covers.
Personal Property
Coverage for your belongings during construction may be limited. Items stored off-site or damaged by the renovation work itself are usually not covered.
Liability Protection
Your liability coverage stays active during the renovation. It covers injuries to visitors on your property. Contractor injuries are covered by the contractor's own workers' compensation, not yours.
Additional Living Expenses
Some policies help cover temporary housing if construction damage makes your home unlivable. This isn't available with every endorsement, so check your policy before assuming it applies.

What Homeowners Insurance Doesn't Cover During Construction

Standard homeowners insurance (even with a dwelling under construction endorsement) excludes coverage for flooding, earthquakes and wear and tear. Know what isn't covered so you can plan for additional protection.

Flood Damage
Homeowners insurance doesn't cover flood-related losses during construction. Buy a separate flood insurance policy to protect your property from flood damage, especially in high-risk areas.
Earthquake Damage
Most homeowners policies exclude earthquake damage whether or not construction is happening. Buy a separate earthquake insurance policy if you're building or renovating in an earthquake-prone region.

Builder's Risk Insurance for Homeowners

Builder's risk insurance is a separate policy for new builds and major renovation projects. It covers the structure, materials and equipment during active construction. Property owners or contractors buy it to protect against fire, theft and weather damage.

When to Get Builder's Risk Insurance

Choose builder's risk insurance if:

You're building a new home from the ground up
Your renovation will take six months or longer
The home will be empty during construction
You're doing a whole-house renovation or structural teardown

Don't choose builder's risk insurance if:

You're doing a short renovation while living in the home. A dwelling under construction endorsement costs less and covers the same risks for projects that finish in a few months.
Your contractor already carries owner-interest builder's risk as part of the contract. Ask before buying a duplicate policy.

What Builder's Risk Insurance Covers

Physical Damage to the Structure
Builder's risk insurance protects against fire, wind, theft, vandalism and other covered risks during construction.
Building Materials
Coverage protects materials on-site, in transit or temporarily stored off-site. Building supplies are insured from purchase until use in construction.
Equipment
Coverage protects tools and construction equipment from theft, damage or other covered perils.
Scaffolding and Temporary Structures
Builder's risk insurance covers scaffolding, temporary structures and construction forms.
Debris Removal
Coverage pays for removing debris after a covered loss so the site can be cleared and work can resume.
Soft Costs
Builder's risk insurance may cover architect fees, permits and construction loan interest from project delays caused by covered events.

CHECK FOR INSURANCE WHEN HIRING A BUILDING CONTRACTOR

Before any contractor starts work, verify they carry liability insurance and workers' compensation. Without it, you may be responsible for accidents or injuries on your property.

What Builder’s Risk Insurance Doesn't Cover

Builder's risk insurance doesn't cover employee thefts, design errors or mechanical breakdowns. Know what isn't covered so you can buy additional coverage. Exclusions include:

Employee Theft
Losses from theft by employees or subcontractors are not covered. This catches homeowners who assume all theft is covered. Builder's risk covers theft from outside the project, like break-ins and vandalism. It doesn't cover theft from the inside. If a subcontractor walks off with materials or tools, that claim will be denied. Fidelity insurance covers that gap.
Normal Wear and Tear
Damage from regular use or aging isn't covered. Builder's risk covers unexpected events, not gradual wear on materials.
Faulty Workmanship
If work is done poorly and something fails, builder's risk won't pay for it. This is the exclusion that produces the most disputes. Homeowners often assume the policy covers anything that goes wrong during construction, but it covers what weather, fire and theft do to the project, not what the contractor does. A subcontractor who improperly installs waterproofing, and water damage that follows months later, falls entirely outside the policy. This is why vetting your contractor matters as much as buying the right insurance.
Design Errors
Losses from mistakes in architectural or engineering plans aren't covered. On custom builds with an architect involved, ask whether they carry professional liability insurance before signing anything. If an architect specifies something that can't be built as drawn and work has already started, the cost to fix it falls entirely on you.
Mechanical Breakdown
Equipment failures unrelated to a covered event like fire or vandalism aren't covered. Keep equipment well maintained and consider separate equipment insurance for larger projects.

DON'T FORGET TO BUY HOME INSURANCE AFTER CONSTRUCTION

Once construction is over, you'll still need to buy homeowners insurance. But don't just buy any policy. The best home insurance for new homes balances affordability with great coverage. Compare quotes from various providers to find the best and cheapest home insurance that fits your needs.

Choosing Between Builder's Risk and Dwelling Under Construction Coverage

The right coverage depends on your project type, how long it runs and whether you'll stay in the home during work.


Best For	Short renovations (under 6 months)	New construction or major projects (6+ months)
Project Type	Kitchen remodel, room addition, bathroom renovation	Ground-up builds, whole-house renovations, tear-downs
Occupancy	You live in the home during work	Home is vacant or unlivable
Coverage	Limited to specific renovation areas	Entire structure plus materials

Choosing the wrong product doesn't just cost more. It can result in a denied claim if the insurer determines the project fell outside the endorsement's terms.

The most common version of this mistake is a project that grows. A kitchen remodel expands into a first-floor renovation, the timeline pushes past the endorsement window, and the homeowner doesn't update coverage because it feels like the same job. The insurer can deny any claim from the period after the endorsement expired.

When Does Construction Insurance Coverage Begin and End?

Both coverage types require you to act before construction begins, not after the first day of work.

Dwelling Under Construction Endorsement: Add this endorsement before construction starts. Coverage begins the same day you add it and runs for a set period, usually 90 to 180 days. Contact your insurer before it expires if the project runs long, since letting it lapse creates a coverage gap with no fix after the fact.
Builder's Risk Insurance: Most policies start on a chosen date and run through the project's estimated end date plus a buffer. Coverage ends at completion, first occupancy or policy expiration, whichever comes first. Once a builder's risk policy expires, it can't be restarted for the same project, so build extra time into your estimate.

Both coverage types require a switch to a standard homeowners policy once construction is done. Notify your insurer when work finishes.

Home Insurance Adjustments for Renovation Plans

Update your coverage before construction begins to protect against damage, liability and unexpected costs.


Increase Coverage Limits	Raise your dwelling coverage to match your home's value after the renovation. If you're adding a $50,000 kitchen, raise coverage by at least that amount.	Underinsurance means paying out of pocket for losses that exceed your policy limit.
Add Construction Coverage	Add a dwelling under construction endorsement or buy builder's risk insurance before work begins.	Standard policies don't cover theft of building materials or damage to unfinished structures.
Verify Liability Protection	Confirm your liability coverage stays active during construction and that limits are high enough for the size of the project.	You're responsible if someone is injured on your property during the project, including subcontractors who don't carry their own workers' compensation.
Update Personal Property Coverage	Tell your insurer if you're moving furniture or belongings off-site or into storage during construction.	Many policies limit coverage for items relocated or in storage during a renovation.
Review Policy Exclusions	Check what your policy doesn't cover during construction, including contractor errors and certain weather events.	Knowing the gaps before work starts lets you buy added protection before you need it.

The coverage limits row is the one most homeowners skip. They add construction coverage but don't raise the dwelling limit. If a total loss happens after the renovation, the payout is based on the pre-renovation amount, not what the home is actually worth.

What Happens if You Skip Home Insurance During Construction?

Skipping construction insurance exposes you to substantial financial losses from theft, damage and liability claims.

1
Theft of Materials and Equipment
Construction sites attract theft. Copper wiring, HVAC units and power tools are the most common targets. Once thieves know materials are staged and the site is empty at night, the same location can be hit more than once. A project without overnight security can sustain multiple theft events before it's done. Without insurance, you pay for each one.
2
Fire and Weather Damage
Unfinished structures aren't protected from rain, wind or fire the way a finished home is. Damage to exposed framing or an open roof can be costly to fix. Fire during construction is especially serious because sprinklers aren't installed yet.
3
Liability for Injuries
If a contractor, subcontractor or visitor gets hurt on your property, you may be responsible for their medical bills and lost wages. Your standard homeowners liability coverage may not apply during active construction. A serious injury can lead to a lawsuit.
4
Lender Requirements
Most construction loans require proof of insurance before the lender releases funds. Without coverage, your lender can pause payments, add expensive force-placed insurance or cancel the loan entirely.

Construction Insurance for Homeowners: Bottom Line

Standard homeowners policies don't cover active construction. For short renovations where you stay in the home, a dwelling under construction endorsement closes the gap. For new builds, longer projects or any project that requires you to move out, builder's risk insurance is the right policy.

Talk to your insurer before the first contractor arrives.

Home Insurance During Construction: FAQ

Construction insurance is necessary during construction because it protects your home and new additions from fire, theft and vandalism. Construction creates vulnerabilities that require continuous coverage for completed structures and work in progress.

Standard homeowners insurance policies provide limited coverage for construction projects. Review your policy and add endorsements or buy additional coverage for full protection during construction.

Construction insurance covers fire, wind, theft and vandalism. Coverage varies by insurer, so confirm what your insurance provider covers before construction begins.

Construction projects often require additional insurance like builder's risk coverage. Builder's risk insurance covers materials, equipment and structures under construction.

Contact your insurance provider to discuss construction plans and adjust your coverage. Your insurer will recommend coverage adjustments and additional policies for your project.

Residential Construction Insurance: Related Articles

About Mark Fitzpatrick

Mark Fitzpatrick, a licensed Property and Casualty (P&C) Insurance Producer in Connecticut, is MoneyGeek's resident insurance expert. He has spent nearly a decade analyzing the market, first at LendingTree and now at MoneyGeek, where he produces original research on hundreds of carriers and millions of rates across auto, home, renters, health and life insurance.

He covers economics and insurance at MoneyGeek, and his work has been featured in The Washington Post, The New York Times and NPR, among other outlets.

Like all MoneyGeek analysts, he draws on independent cost and consumer experience data. No insurance company partnership influences his recommendations.

Mark holds a B.A. from Boston College and an M.A. in Economics and International Relations from Johns Hopkins University. He started his career in financial risk management at State Street and is also a five-time “Jeopardy!” champion.

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