Updated: August 29, 2025
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Standard homeowners insurance may not cover new construction, especially if the home is unoccupied or being built from the ground up.
Builder’s risk insurance is ideal for new builds or long-term projects, while a dwelling under construction endorsement works best for short-term renovations.
Always review your policy with your insurer before construction to ensure adequate coverage and avoid protection gaps.
Standard homeowners insurance doesn't provide adequate protection during construction or major renovations. For new construction or extensive projects, you need builder's risk insurance. For shorter renovations, dwelling under construction endorsements work better.
Both coverages protect against theft, vandalism and property damage during construction but won't cover construction delays or faulty workmanship. Contact your insurer to determine coverage requirements before construction begins.
Insurance needs differ when you live in your home during renovations versus leaving the property vacant. With occupied homes, insurers offer more flexibility because occupancy reduces theft and unnoticed damage risks. Major structural changes or long-term projects require additional coverage. Tell your insurer whether you'll occupy the home during renovations so they can recommend appropriate coverage.
Dwelling under construction endorsements add short-term coverage to your homeowners policy. These endorsements protect against theft and damage during renovations like room additions or kitchen remodels. Without this coverage, your standard policy won't cover theft or damage during active construction.
Major structural changes or projects requiring you to move out trigger full construction periods. For these extensive projects, dwelling under construction endorsements prevent coverage gaps.
For projects lasting longer than a couple of months, especially full home builds, a separate builder’s risk policy is usually more appropriate.
A dwelling under construction endorsement adds protection for your property while it’s being built or renovated. While coverage varies significantly by insurer and policy, here are some protections that may be included:
A dwelling under construction endorsement may cover damage to both the existing home and new additions caused by covered perils like wind, fire or vandalism. Always check your policy to confirm what's included.
Coverage for personal belongings during construction may be limited. Items stored off-site or damaged by the renovation work itself might not be covered.
Liability coverage usually remains in effect, protecting you if someone is injured on your property during the renovation. But contractor injuries are typically not covered (they need their own insurance).
Some policies help cover temporary living expenses if construction damage makes your home uninhabitable. This coverage varies by insurer and isn't available with every endorsement.
Always review your specific policy documents to confirm what coverage applies to your situation.
Standard homeowners insurance (even with a dwelling under construction endorsement) has coverage gaps. Perils like flooding, earthquakes, and wear and tear are typically excluded. Knowing what isn't covered helps you plan for additional protection.
Homeowners insurance does not cover flood-related losses, including those that occur during construction. To protect your property from flood damage, you’ll need a separate flood insurance policy, especially in high-risk areas.
Earthquake damage is also excluded from most homeowners policies, regardless of whether construction is happening. If you’re building or renovating in an earthquake-prone region, a separate earthquake insurance policy is recommended.
Builder's risk insurance is temporary coverage designed specifically for construction projects. Property owners or contractors typically purchase this policy to protect against fire, theft and weather-related losses. Common coverage features include:
Builder's risk insurance offers protection against fire, wind, theft, vandalism and other covered risks during construction, ensuring that the primary structure is safeguarded against unforeseen incidents.
Your coverage includes protection for materials on-site, in transit or temporarily stored off-site. This ensures building supplies are insured from the moment they are purchased until they are used in construction.
This insurance protects tools and construction equipment used in the building process. It covers losses due to theft, damage or other covered perils, ensuring essential equipment remains available and functional.
Builder’s risk insurance covers crucial elements like scaffolding, temporary structures and construction forms.
The policy covers costs associated with removing debris after a covered loss. This ensures the site can be quickly cleared and work can resume without significant delays.
Builder's risk insurance may cover additional expenses like architect fees, permits and interest on construction loans due to project delays caused by covered events. This coverage helps manage unexpected financial burdens that arise from construction interruptions.
Verify your contractor carries adequate insurance coverage, including liability and workers' compensation. With proper contractor insurance, you avoid financial liability for accidents or construction damage.
Builder's risk insurance doesn't cover everything, such as employee thefts, design errors or mechanical breakdowns. Understanding what isn't covered ensures you can purchase additional coverage for all your risks. Builder's risk insurance costs don't cover:
Losses resulting from theft or dishonest acts committed by employees or subcontractors are usually not covered. Internal theft requires a separate policy like fidelity insurance.
This includes damage to materials and equipment that happens naturally over time due to regular use or aging. Builder's risk insurance is designed to cover unexpected events, not the gradual deterioration of construction materials.
Builder's risk insurance doesn't usually cover defects or failures in the construction process due to poor-quality work or improper techniques. This coverage gap emphasizes the importance of hiring reputable contractors and tradespeople.
This includes losses that arise from mistakes in design, planning or engineering. Builder's risk insurance does not cover flaws or omissions in the architectural or engineering plans, which would require professional liability insurance.
Failures of machinery or equipment breakdowns unrelated to a covered peril, such as fire or vandalism, are usually not covered. Regular maintenance and separate equipment insurance are necessary to cover these incidents.
Like dwelling under construction insurance, builder's risk doesn’t cover faulty workmanship, design errors or mechanical breakdowns. Planning ahead for such instances and choosing a reputable contractor can ensure financial protection on all fronts.
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, so make sure to compare quotes from various home insurance providers.
Renovations can increase the value of your home and introduce new risks, making it essential to update your coverage. Proper changes to your home insurance can safeguard against potential damages, liability issues and unexpected costs. Typical policy adjustments for a smooth and secure renovation process include:
Ensure your policy covers the increased value of your home post-renovation. This protects your investment and ensures that the new additions are included in your coverage.
Consider adding builder's risk insurance to protect against construction-related risks like theft, vandalism and weather damage.
Ensure that your liability coverage is sufficient to cover potential injuries to workers or visitors during the renovation. This helps manage legal and medical expenses if accidents occur on your property.
Adjust your personal property coverage to protect any new appliances, fixtures or furniture added during the renovation. This ensures that all new items are insured against potential damage or theft.
Understand and address any exclusions in your policy that might affect coverage during renovations. This includes checking for exclusions related to construction defects, design errors and mechanical breakdowns.
Before starting any construction or renovation project, adjust your home insurance policy to ensure adequate coverage for your home and new additions against potential risks. Timely adjustments protect your investment and provide comprehensive coverage throughout the construction process.
Skipping insurance during construction may feel like a way to save money, but it can leave you exposed to serious risks. From property damage to lawsuits, even a single incident could set you back financially for years.
Construction zones are full of hazards like loose wiring, exposed nails, and heavy equipment. If a worker, subcontractor or even a visiting neighbor gets injured, you could be held liable for their medical costs and legal claims without insurance.
Many lenders require proof of insurance before releasing funds for a build or major renovation. If you let coverage lapse, your lender might delay financing, impose costly force-placed insurance or even stop the project altogether.
Construction sites are especially vulnerable to fires, weather damage, and theft of valuable materials. Without insurance, losing lumber, wiring or newly finished sections of the home could mean starting over at your own expense.
Homeowners policies usually don't cover construction work, especially on empty homes or ground-up builds. You might need builder's risk insurance or a dwelling under construction endorsement to keep your project covered. Talk to your insurer before construction starts to avoid gaps in coverage and protect your investment.
Construction insurance requirements vary by state and local area. Check with a licensed insurance agent to learn what's required where you live.
Planning construction on your home can be an exciting but complex process. We address some common questions about homeowners insurance during construction to help you through your renovation or building plans.
Homeowners insurance during construction protects your existing home and new additions from fire, theft and vandalism risks. Construction periods create vulnerabilities that require continuous coverage for both completed structures and work in progress.
Standard homeowners insurance policies offer limited coverage for construction projects. To ensure full protection during construction, review your policy and add endorsements or obtain additional coverage.
Homeowners insurance during construction covers fire, wind, theft and vandalism risks. Coverage varies by insurer, so confirm specific risks covered by your insurance provider before construction begins.
Construction projects often require additional insurance like builder's risk coverage for comprehensive protection. With builder's risk insurance, you get broader coverage for materials, equipment and structures under construction.
Contact your insurance provider to discuss construction plans and adjust your policy coverage. Your insurer will guide you on necessary coverage adjustments and additional policies required for your project.
MoneyGeek analyzed quotes from multiple insurance providers across the U.S. using a profile that reflects the average homeowner. By considering different locations and companies, we aim to give a reliable estimate of what homeowners can expect to pay, showing why it’s important to compare rates.
Homeowner Profile
For our analysis, we created a sample homeowner profile with the following characteristics:
Homeowners Insurance Coverage Details
Unless otherwise specified, we used the following coverage limits to collect quotes for our comparison:
We also compiled data for policies with broader coverage to determine the best companies for insuring expensive homes, upping limits to $1 million in dwelling coverage, $500,000 in personal property coverage and $1 million in liability coverage.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.
