Home Renovation Insurance: Builder's Risk vs Homeowners Policy

Direct answer: Builder's risk insurance should generally be in place before the first day of construction on a major renovation or addition, since standard homeowners policies frequently exclude damage tied directly to an active renovation project.

Why your existing policy may not be enough

Homeowners insurance is written around a stable, occupied structure. Once a home is under active construction — open walls, exposed framing, contractors and equipment on site — the risk profile changes enough that many standard policies either reduce coverage or exclude renovation-related losses outright.

Timing the builder's risk policy

Because coverage needs to be active before work begins, most contractors and lenders on renovation loans will ask for proof before the first permit is pulled or the first day of demolition, not after.

After the renovation: updating dwelling coverage

Once the project is complete, the home's rebuild cost has likely increased. Reporting the completed value to your homeowners insurer — commonly within about 30 days of completion — helps avoid being underinsured relative to the home's new replacement cost.