Introduction: Building a Home? Here’s What Could Go Wrong
Most homeowners focus on their dream when they build. The finishes. The floor plan. The future. But very few stop to ask, “What if something goes wrong during construction?” The reality is, your home is at risk before you even move in. Fires, theft, vandalism, water damage, and severe weather are all possibilities. And standard homeowners insurance doesn’t cover a structure that isn’t finished.
That’s where builder’s risk insurance comes in. This type of policy protects your investment while it’s being built. It’s short-term, but critical. If something unexpected happens on site, it helps cover the cost to repair or replace what was damaged. Without it, you may be left paying out of pocket.
At Elev8 Construction, we’ve seen how important this coverage is. And we always make sure our clients understand it before we ever break ground. Whether you’re building a brand new custom home or taking on a major remodel, you want to build with peace of mind, not just hope. In this blog, we’ll break it all down. What it covers. What it doesn’t. Who’s responsible? And how we help you protect your project from day one.
What Is Builder’s Risk Insurance?
Builder’s risk insurance is a type of property insurance. It’s specifically designed to protect buildings while they’re under construction. It covers the structure itself, materials on site, and sometimes even equipment or temporary structures like scaffolding. Think of it as coverage for your half-built home. It fills the gap between when construction starts and when your traditional homeowner’s insurance takes over. If a storm damages framing, or materials are stolen from the job site, builder’s risk can cover the repair or replacement cost.
These policies are temporary. Most last three, six, or twelve months depending on the project timeline. You can extend it if the build takes longer. Once the home is complete and occupied, the policy ends and is replaced by a standard homeowner’s policy. The goal is simple. Builder’s risk gives you financial protection when the structure is most vulnerable. It minimizes delays, prevents major losses, and allows the build to continue even after setbacks.
We help our clients understand whether they need to secure the policy or if it’s something we’ll handle. Either way, it’s a step no one should skip.
What Does It Typically Cover?
Builder’s risk insurance covers a wide range of potential threats to your under-construction home. While every policy is different, most include protection for:
- Fire and lightning
- Theft of building materials
- Vandalism or malicious mischief
- Wind, hail, and other weather damage
- Damage from vehicles or construction accidents
- Collapse or structural damage during construction
- Tools and equipment (sometimes)
It also may cover materials in transit or stored off-site, depending on the policy. For example, if your windows are being delivered and damaged in transport, you may be able to file a claim. Some builder’s risk policies also cover soft costs. These are indirect expenses, like permit fees, interest payments, or extra design work caused by delays.
This kind of coverage ensures the project can move forward, even after a major hiccup. It prevents financial strain and gives homeowners and builders the confidence to handle problems as they come up. Our team at Elev8 reviews every coverage item with our clients. We make sure expectations are clear. You should never be left wondering what’s protected.
What’s Usually Not Covered?
While builder’s risk insurance covers a lot, it doesn’t cover everything. Knowing what’s excluded is just as important as knowing what’s included.
Most policies do not cover:
- Workmanship defects or design errors
- Normal wear and tear
- Acts of terrorism or war
- Employee theft or fraud
- Flood or earthquake damage (unless added separately)
- Injury to workers or subcontractors
- Tools owned by subcontractors
- Personal property inside the structure
Some of these exclusions surprise homeowners. For example, if your contractor makes a mistake during framing, and the structure needs to be redone, the builder’s risk won’t pay for that. It also won’t cover injuries, those are handled by general liability or workers’ comp.
Who Needs to Carry the Policy, You or the Builder?
This is a common question. The answer? It depends on the project, the lender, and your contract. In many cases, the homeowner is responsible for securing the builder’s risk policy, especially if you’re using construction financing, since lenders typically require this coverage before approving the loan. And here’s where Elev8 can help: not every traditional insurance agency even offers builder’s risk, but we do. With our competitive rates, we can supplement your coverage effectively and ensure you’re not left scrambling.
In other cases, the builder may carry the policy and include it in the project cost. This is more common in spec home builds or builder-financed construction.
At Elev8, we help clarify who needs to hold the policy based on your situation. If it’s your responsibility, we can refer you to trusted insurance providers who understand custom homebuilding. We’ll also help you know what coverage to look for and what to avoid. The most important thing is that coverage is active before the first day of construction. Waiting too long to insure your project could leave you exposed if something happens during the early stages.
How Much Does Builder’s Risk Insurance Cost?
At Elev8, our builder’s risk insurance rates typically land closer to 0.5% of the total construction value, a significant advantage compared to the industry average of 1% to 4%. That means if your build is valued at $500,000, your coverage could cost around $2,500 for the full term, instead of $5,000 to $20,000. This lower rate helps keep your project budget on track without sacrificing the protection you need.
Several factors affect the cost:
- Total project value
- Location of the build
- Duration of the project
- Type of construction (wood frame, steel, etc.)
- Whether additional coverage is included (like soft costs or off-site storage)
Some insurance companies offer flat-rate policies for smaller projects. Others offer flexible, extendable plans for longer or more complex builds. While the cost may feel like “one more thing” to budget for, it’s a smart investment. One unexpected storm, fire, or theft incident can easily cost more than the entire policy.
How Elev8 Helps You Navigate the Fine Print
At Elev8 Construction, we don’t expect you to understand insurance jargon or policy exclusions. That’s our job. We help homeowners navigate the fine print, ask the right questions, and secure the right protection. We’ve worked with dozens of clients through new home construction and renovations and remodels. In both cases, we walk through what’s needed based on the type of project, timeline, and financing. Some clients secure the policy themselves. Others have us handle it as part of the overall build.
Our team coordinates with your lender, your insurance provider, and your timeline. We make sure nothing is left uncovered. That way, you can focus on design, layout, and the fun parts of the build without worrying about the what-ifs. Our role is more than just building. It’s guiding. Protecting. And making sure every client feels secure from start to finish. When you’re working with Elev8, you’re never left in the dark.
Conclusion: Don’t Break Ground Without Proper Protection
Builder’s risk insurance isn’t just a formality. It’s your financial safety net while your home is under construction. Without it, one unexpected event could cost you time, money, and peace of mind. The good news is that this coverage is accessible, flexible, and easy to secure with the right guidance. At Elev8, we make sure every project is protected before day one. Whether we secure the policy or guide you through it, you won’t have to figure it out alone.
If you’re planning to build or remodel, don’t skip this step.
We’re here to help you build smart and stay protected.
Contact Elev8 Construction to schedule a consultation. Let’s get your project started the right way.
FAQs
1. What is builder’s risk insurance?
Builder’s risk insurance is a special type of property insurance. It covers a home under construction against damage from fire, theft, vandalism, weather events, and other risks. It protects the building materials, equipment, and the work already completed on the job site.
2. Do I need builder’s risk insurance if my contractor has general liability insurance?
Yes. General liability protects the contractor against third-party claims. Builder’s risk insurance protects the project itself. Without it, damage to the structure or materials may not be covered.
3. Who typically pays for builder’s risk insurance- the builder or the homeowner?
It depends on the contract. In some cases, the builder includes it in the total cost. In others, the homeowner is responsible. Always clarify who holds the policy before construction begins.
4. When does builder’s risk insurance coverage end?
Coverage typically ends when the home is completed and ready for occupancy. At that point, a standard homeowner’s insurance policy should take over.
About the Author
Hi, I’m Connor, owner of Elev8 Construction. My team and I take pride in helping families and businesses across Central Nebraska build and transform spaces they love. Whether it’s a custom home, a remodel, an addition, or even a commercial project, we put craftsmanship, communication, and care into every detail.
Building or remodeling a home is a big deal — and I’m here to make the process as smooth and enjoyable as possible. If you’re thinking about starting your next project, I’d love to connect and talk about how we can bring your ideas to life.
Website: https://elev8308.com/
Phone: +13083464180