A house that is half built is not insurable as a house, and the market's answer is a different product: builder's risk, also called course of construction coverage, a policy written for a structure in the act of becoming one. It covers the project, the partially completed building, materials on site and in transit, against fire, wind, theft and vandalism through the build. Around it sit questions that catch first-time builders: who buys the policy, what it deliberately excludes, and how coverage hands off to a standard homeowners policy when the certificate of occupancy arrives. This page walks the sequence.
What builder's risk covers
The policy insures the emerging structure and the property that becomes it: framing and finished work in place, materials and fixtures stored on site awaiting installation, and often materials in transit or briefly stored elsewhere. Covered perils typically include fire, lightning, wind, hail, theft of materials and vandalism, the losses that actually hit job sites. Limits should track the completed value of the build, and the term should honestly match the schedule, since policies are written for fixed periods and construction rarely finishes early; extensions exist but are cleaner arranged before expiry.
Who buys it, and who is insured on it
Either the owner or the general contractor can carry builder's risk, and the answer belongs in the construction contract before ground breaks, not in a dispute after a fire. What matters is that all parties with property at stake, owner, general contractor, subcontractors as their interests appear, are named or covered as insureds, so a loss does not send them litigating against each other. An owner financing construction will also find the lender requires the policy and its own place on it, the same collateral logic consumer guidance from the CFPB describes for standard homeowners requirements.
What it deliberately does not cover
Builder's risk insures the project against external perils, not the quality of the work: defective workmanship, design errors and the cost of redoing bad construction are excluded, the province of contractor warranties and liability policies. Liability generally is not in the policy either; injuries on site belong to the contractor's general liability and workers compensation coverage, which owners should verify by certificate before work begins. Tools and equipment belong to the contractor's own coverage. And the big excluded perils match the homeowners world: flood and earthquake need separate arrangements where the site warrants them.
The handoff at completion
Builder's risk ends when the project does, at policy expiry, occupancy or completion depending on terms, and the homeowners policy must be bound to meet it, ideally effective at the certificate of occupancy with no gap. Renovation projects run a parallel logic: substantial remodels of an occupied home may need the existing homeowners policy endorsed or a renovation builder's risk alongside, and insurers expect notice of major work regardless. At handoff, set the new dwelling limit from the completed home's actual rebuild cost, which the construction contract prices better than any estimator tool will.
Questions people ask about home under construction insurance
Does homeowners insurance cover a house being built?
Not properly; standard policies are written for completed, occupied homes. Builder's risk, or course of construction, coverage insures the structure, materials and site through the build.
Who should buy builder's risk?
Owner or general contractor can; the construction contract should decide before work starts, and all parties with property at stake should be insureds. Construction lenders require the policy either way.
Does it cover bad workmanship or injuries?
No. Defective work is excluded, covered by warranties and the contractor's liability arrangements, and site injuries belong to the contractor's general liability and workers compensation, which owners should verify by certificate.
When does the homeowners policy take over?
At completion or occupancy, ideally bound effective at the certificate of occupancy with no gap. Set its dwelling limit from the completed build's actual cost.