Updated: November 7, 2025
Advertising & Editorial Disclosure
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 covers new builds or long-term projects, while a dwelling under construction endorsement covers short-term renovations.
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) excludes coverage for flooding, earthquakes and wear and tear. Know what isn't covered so you can plan for additional protection.
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.
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 is temporary coverage for construction projects. Property owners or contractors buy this policy to protect against fire, theft and weather-related losses. Common coverage features:
Builder's risk insurance protects against fire, wind, theft, vandalism and other covered risks during construction.
Coverage protects materials on-site, in transit or temporarily stored off-site. Building supplies are insured from purchase until use in construction.
Coverage protects tools and construction equipment from theft, damage or other covered perils.
Builder's risk insurance covers scaffolding, temporary structures and construction forms.
Coverage pays for removing debris after a covered loss so the site can be cleared and work can resume.
Builder's risk insurance may cover architect fees, permits and construction loan interest from project delays caused by covered events.
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 employee thefts, design errors or mechanical breakdowns. Know what isn't covered so you can buy additional coverage. Exclusions include:
Losses from theft or dishonest acts by employees or subcontractors usually aren't covered. Buy a separate policy like fidelity insurance for internal theft.
Damage to materials and equipment from regular use or aging isn't covered. Builder's risk insurance covers unexpected events, not gradual deterioration of construction materials.
Builder's risk insurance doesn't cover defects or failures from poor-quality work or improper techniques. Hire reputable contractors and tradespeople.
Losses from mistakes in design, planning or engineering aren't covered. Buy professional liability insurance for architectural or engineering plan flaws.
Machinery failures or equipment breakdowns unrelated to covered perils like fire or vandalism usually aren't covered. Buy separate equipment insurance and maintain your equipment regularly.
Like dwelling under construction insurance, builder's risk doesn't cover faulty work quality, design errors or mechanical breakdowns. Plan ahead and choose a reputable contractor for financial protection.
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.
Renovations increase your home's value and introduce new risks. Update your coverage to protect against damage, liability issues and unexpected costs. Policy adjustments for renovation 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.
Add builder's risk insurance to protect against construction-related risks like theft, vandalism and weather damage.
Confirm your liability coverage covers potential injuries to workers or visitors during renovation. This covers legal and medical expenses if accidents occur on your property.
Adjust your personal property coverage to protect new appliances, fixtures or furniture added during renovation.
Check for exclusions in your policy that affect coverage during renovations, including 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 leaves you exposed to serious risks. Property damage or lawsuits from 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 don't cover construction work, especially on empty homes or ground-up builds. You'll 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 coverage gaps and protect your investment.
Construction insurance requirements vary by state and local area. Check with a licensed insurance agent for your area's requirements.
Planning construction on your home is exciting but complex. Here are common questions about homeowners insurance during construction.
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.
Homeowners planning construction need insurers offering builder's risk coverage or dwelling under construction endorsements at competitive rates. We analyzed quotes to identify companies balancing affordable premiums with comprehensive protection during construction projects.
We gathered quotes from multiple insurance providers across the U.S. using a sample homeowner profile: good credit (769-792), home built in 2000, wood-frame construction and composite shingle roof.
For standard coverage comparison, we used $250,000 dwelling coverage, $125,000 personal property, $200,000 liability and a $1,000 deductible. For higher-value homes, we used $1 million dwelling coverage, $500,000 personal property and $1 million liability.
This approach reveals which insurers offer the best rates for construction-related coverage, helping homeowners find affordable protection whether they're adding a room or building from the ground up.
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!
He writes about economics and insurance, breaking down complex topics so people know what they're buying.
