Builders risk insurance covers your home during construction. Builders risk may also cover construction materials that are pending installation. Builders risk insurance is often required for a construction loan. The homeowner usually purchases this type of insurance; however, in some cases the contractor/builder may purchase it as well. Builders risk insurance is regularly offered on a "special perils" basis. Special perils policies are a form of all-risk coverage subject to certain exclusions.
You may purchase builders risk insurance for new construction projects, large-scale renovations and smaller remodels. If you are performing a renovation or remodel, builders risk insurance may cover the existing structure as well as the additions/renovations.
Builders risk insurance is designed to start before construction begins and generally ends when the building is put to its intended use or sold. Discounted rates may apply to customers who purchase the policy before construction has begun.