Builders Risk Insurance vs. Homeowners Insurance: What’s the Difference?

If you’re planning a home renovation, addition, or new construction project, it’s important to know the difference between builders risk insurance and homeowners insurance. While both protect property, they cover very different risks and situations.

Understanding the distinctions ensures your investment is protected without leaving gaps in coverage.

What Homeowners Insurance Covers

Homeowners insurance is designed for completed, occupied residences. Standard coverage typically includes:

• Dwelling protection: Covers the physical structure from fire, wind, hail, and vandalism

• Personal property coverage: Protects your furniture, electronics, and belongings

• Liability protection: Covers injuries or accidents occurring on your property

• Additional living expenses: Pays for temporary housing if the home becomes uninhabitable

However, homeowners insurance generally excludes buildings under construction or major renovations. Using a standard policy during a remodel can leave your investment exposed.

Learn more from the Insurance Information Institute.

What Builders Risk Insurance Covers

Builders risk insurance is designed specifically for homes under construction or renovation. Coverage typically includes:

• Structure under construction: Protects against fire, wind, vandalism, and lightning

• Materials and equipment: Covers supplies on-site or in transit

• Temporary structures: Includes scaffolding, sheds, or storage containers

• Optional endorsements: Flood, earthquake, soft costs, and extended coverage for delays

Builders risk policies are temporary, generally expiring once construction is complete or the home is occupied. For more on construction-specific insurance, see the National Association of Home Builders.

Key Differences Between the Two Policies

Feature	Homeowners Insurance	Builders Risk Insurance
Coverage Period	Permanent, for occupied homes	Temporary, during construction or renovation
Property Covered	Completed home and personal belongings	Structure under construction, materials, temporary structures
Liability	Tenant and visitor protection	Usually property-focused; separate liability may be needed
Optional Endorsements	Limited	Flood, earthquake, soft costs, and delay coverage
Intended Use	Everyday living and protection	Construction projects and major renovations

Why You May Need Both

Many homeowners may require both policies at different times:

• Homeowners insurance protects your home before and after construction.

• Builders risk insurance protects your home during construction or renovations.

Failing to carry builders risk coverage during a renovation could leave you financially responsible for fire, theft, or water damage, which your homeowners insurance may exclude.

How Wexford Insurance Helps

At Wexford Insurance, we specialize in helping homeowners and contractors select the right coverage for every stage of a construction project. Our team can help you:

• Determine if your project requires builders risk insurance

• Add optional endorsements for flood, soft costs, or earthquake

• Coordinate coverage with existing homeowners insurance

👉 Request a builders risk insurance quote from Wexford Insurance today and ensure your home and investment are fully protected.

REQUEST A FREE QUOTE

Frequently Asked Questions

• What does builders risk insurance cover for renovations and new construction?

• How much does builders risk insurance cost for residential and commercial projects?

• When should I buy builders risk insurance for my construction project?