Builders risk insurance for remodeling and renovation
A renovation puts new work inside a building that already has value. The owner's property policy may restrict coverage while the building is under major renovation or vacant, so renovation builders risk covers the project itself.
Existing structure: covered or not
This is the most important question on a renovation policy. Some forms cover only the new work and materials. Others can include the existing building, which matters if a fire during the project destroys the whole structure, not just the new kitchen.
Check the owner's current property policy before deciding. Many homeowners and commercial property policies restrict coverage when a building is vacant or under substantial renovation.
Apply online
The online application asks the questions underwriters need for this coverage. Business owners fill it out directly, and insurance agents can complete it for a client or send it to them. Insurance agents can also request an appointment.
What the application asks
- Year built, construction type and square footage of the existing building
- Scope of work: interior only, structural changes, additions, roof replacement
- Value of the renovation work and value of the existing structure
- Whether the building will be occupied during the work
- Updates to electrical, plumbing, heating and roof
Fix-and-flip investors
Investors renovating houses to resell often need renovation builders risk instead of a vacant dwelling policy, because a standard vacant policy may exclude work on the property. Tell the underwriter the house is being rehabbed for resale.
Gaps to ask about on a renovation
Vacancy conditions
Some forms limit theft, vandalism or water damage once the building has been empty for a set number of days. Ask how vacancy is defined and whether it applies during the work.
Water damage from open roofs and plumbing
A roof tear-off or a plumbing reroute can let water in. Ask whether rain entering through an opening made by the work is covered, and what the policy requires to protect the building overnight.
Old wiring and building code upgrades
If an older building is damaged, rebuilding to current code can cost more than the original. Ask whether ordinance or law coverage is available for the existing structure.
How to get a renovation builders risk quote
- Read the owner's current property policy and note what it says about vacancy and renovation.
- Write a short scope of work: which rooms or systems, any structural changes, and whether the roof comes off.
- Separate the value of the renovation work from the value of the existing building.
- Gather the year built, construction type, square footage and the age of the roof, wiring, plumbing and heat.
- Say whether anyone will live in or use the building during the project.
- Complete the renovation application and name the owner, contractor and any lender.
Common questions
Does the homeowner's policy cover a remodel?
Sometimes, for small projects in an occupied home. Large projects, vacant homes and structural work often fall outside the homeowners policy, which is when renovation builders risk is used.
Who buys renovation builders risk, the owner or the contractor?
Either one, depending on the contract. The contractor buying it should name the owner, and any lender, on the policy.
What happens to the policy when the renovation is done?
Renovation builders risk usually ends when the work is complete or the building is occupied. Arrange the owner's regular property or homeowners policy to start on that date so there is no gap.
Need a contractor license bond?
Many states and cities require a contractor license bond before you can get licensed or pull permits. Find the bond your state requires.
Ready for a quote?
One online application. Owners and agents both welcome.
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