Coverage for a building while it is being built, gutted, added onto or remodeled, in Oklahoma and Texas. A homeowners or commercial property policy is written for a finished building with people in it. Once the framing is open and materials are stacked on site, that policy has gaps a storm will find. Builders risk closes them for the life of the project.
Who buys builders risk
Custom and spec builders
A new home or small commercial building from the slab up. The policy carries the completed value from day one, whether you build one house a year or twenty.
Investors doing a rehab
A flip, a gut renovation or a rental you bought to fix up. The existing structure and the new work can both be covered while the property sits empty.
Homeowners with a major remodel
A second story, a room addition or a whole-house remodel large enough that your home policy will not follow the project. Some carriers let the homeowner be the named insured, some want the contractor.
What we need to quote it
Six answers get you a real number, usually the same day. Have them ready and the quote form takes about five minutes.
- Has work started? Most carriers want the policy in place before the first nail. If the project is already under way, say so up front. A few markets will still write it, most will not, and we do not want to waste your afternoon.
- New construction or renovation? This changes the form and the questions below.
- Completed value. The hard cost to build or renovate, including materials and labor, not the land and not the sale price.
- How long the project will take. Policies run 3, 6, 9 or 12 months and can be extended. Estimate honestly. Running out of term mid-project is the most common claim problem we see.
- The address and the lot. Wind and hail zone, fire protection class and whether the site is fenced all move the rate.
- Who should be the named insured. Usually the party who owns the building while it is under construction: the builder on a spec, the owner on a custom or a remodel. We can add the lender and the general contractor as additional insureds.
Renovation is a different policy than new construction
On a new build there is nothing to protect until you put it there, so the policy covers the value of the work as it goes in. On a renovation there is already a structure standing, and you have to decide whether the policy covers just the new work or the existing building too.
- Existing structure coverage. If the house you are gutting burns during the remodel, a "renovation work only" policy pays for the new drywall, not the house. Investors almost always want the existing structure included. Homeowners who keep their home policy in force sometimes do not.
- Is it occupied during the work? A homeowner living upstairs while the kitchen is redone is a different risk than an empty rental with the copper exposed. Carriers ask, and the wrong answer can void the claim.
- Vacancy. A property that will sit empty for more than 60 days needs either builders risk or a vacant dwelling policy. Which one depends on whether work is actually happening.
What the policy covers, and what it does not
Every carrier's form is different, and the form we place you with controls. As a rule, this is where the lines fall.
Usually covered
The structure under construction. Materials, fixtures and equipment that will become part of the building, on the job site, in transit and in temporary storage. Fire, lightning, wind, hail, vandalism and theft of installed or stored materials. Debris removal after a covered loss.
Add if you need it
Soft costs when a covered loss delays the job, such as extra interest, re-permitting and extended architect fees. Scaffolding, forms and temporary structures. Flood and earthquake, which are excluded on the base form and can sometimes be bought back. Higher theft limits for copper and appliances.
Not this policy
Liability if a visitor is hurt on site. That is general liability. Your tools, generators and trailers, which belong on an inland marine policy. Faulty workmanship or design, the contractor's own employees (workers comp), and normal wear.
Why Oklahoma projects need this more than most
A house is at its most exposed between framing and dry-in, and in Oklahoma that window lands in hail season more often than not. Open framing, stacked shingles and a roof deck with no covering do not survive a spring cell the way a finished house does. The Oklahoma Insurance Department has named hail the single largest pressure on property rates in the state, and a builders risk claim during framing is exactly the loss they mean.
Two practical points from the projects we insure:
- Buy the full term up front. Extending a policy that is about to expire is possible, but a carrier will not extend one that has already lapsed, and it will not write a new policy on a half-finished building.
- Report the completed value honestly. Builders risk is priced on the finished number. Underinsuring to save premium leaves you short on the day the roof comes off.
Builders risk questions we get asked
Can I buy builders risk after construction has started?
Sometimes. Most carriers require the policy to be bound before work begins, and nearly all require it before framing. If your project is already under way, tell us how far along it is. A few markets will inspect and write it, and we will tell you plainly if none will.
Who should be the named insured, the owner or the contractor?
The party who owns the building while it is under construction and would suffer the loss. On a spec home that is the builder. On a custom home or a remodel it is usually the owner, with the contractor and the lender added as additional insureds. Lenders often require a specific arrangement, so send us the loan closing instructions if there are any.
How long does a builders risk policy last?
Terms are typically 3, 6, 9 or 12 months, chosen to match the construction schedule. Most can be extended once or twice while still in force. The policy ends when the building is finished and occupied, sold, or the term expires, whichever is first, and at that point a permanent property policy takes over.
Does builders risk cover my tools and equipment?
No. Builders risk covers the building and the materials that will become part of it. Hand tools, power tools, generators, skid steers and trailers need a contractor's equipment or inland marine policy. We write both and can quote them together.
Does my homeowners policy cover a remodel?
For a small project, often yes, up to the dwelling limit and subject to the policy's vacancy and "under construction" language. For a major remodel, an addition or anything where you move out during the work, most home carriers either exclude the project or cancel once they learn of it. Call us before the permit is pulled and we will read your policy with you.
Do you write builders risk in Texas too?
Yes. Oklahoma and Texas. Texas coastal counties have their own wind requirements, so tell us the county on a Texas project and we will route it to a carrier that writes there.
Related: contractors insurance for the general liability and tools side of the same job, real estate investor insurance for the portfolio after the rehab is done, and contractor license bonds if the city wants one before the permit.