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Home > Blog > Do I Need a Builder’s Risk Policy for a Remodel? - ProRisk Advisors
TUESDAY, AUGUST 10, 2021

Do I Need a Builder’s Risk Policy for a Remodel?

Are you planning to remodel your home? Will you build a new addition, or will you simply make major improvements to the rest of the home? In either case, it’s going to cost you money, and it might even mean involving the services of a professional contractor. Should a portion of the home under remodel sustain damage, then you might face a big financial loss. Can insurance help you out? a man in a helmet holding a baseball bat  

In many cases, yes. You might, however, need to get a builder’s risk insurance policy during this time period. Here is just a little more information on why. 

The Financial Risks of Remodeling Your Home 

Suppose that you are very good at construction, and decide that it is time to knock out a couple of walls to turn two rooms into one. You might decide to make the space between your kitchen and dining room an open floor plan. You might even want to make this part of a larger remodel.  

In the end, your household changes might cost several thousand dollars. It’s a costly investment that you don’t want to lose out on. Where you need to be careful is to see if your homeowners insurance will cover construction in progress. 

Why You Need Builder’s Risk Coverage 

After you finish a remodel, you will need to update your homeowners policy to reflect the recent addition. However, during the renovation, your standard home insurance might not be able to provide adequate help for damage or perils impacting the construction. In these cases, you might need to take out a builder’s risk insurance policy. 

With a builder’s risk policy, you’ll extend targeted property protection to the structures under construction, and the assets associated with them. A policy might provide coverage for: 

  • The building materials and fixtures waiting to be used in the project 

  • Construction materials like scaffolding, tools and temporary structures 

  • Certain signage, landscaping and fencing 

  • Income lost as a result of damaging occurrences 

Coverage might kick in following hazards or perils which might include: 

  • Properties damaged by theft or vandalism 

  • Severe weather occurrences and windstorms 

  • Fire damages 

  • Floods 

However, all policies vary. That’s why it is important to talk to your insurance agent about what type of builder’s risk coverage you need.  

And yes, if you are the homeowner, and plan to do the job yourself, then yes you might need this coverage. Builder’s risk policies are not limited just to contractors. They can help anyone who plans to undertake property renovations. Still, don’t forget, you have to keep your homeowners policy active throughout the construction project. It’s there to help in other very important ways. 

Posted 11:52 AM

Tags: builders, risk, insurance, coverage, liability
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