Builders Risk vs. Homeowners Insurance: What’s the Difference?

Builders risk addresses a building project while work is underway. The NAIC glossary describes it as coverage for buildings in the course of construction. A homeowner should not assume an ordinary home policy automatically covers the same project, especially when the home is unoccupied, substantially altered, or not yet in normal use. The answer depends on the homeowners contract and insurer’s requirements.

For a renovation, check the existing homeowners policy before work begins. The specimen ISO builders risk form excludes the existing structure undergoing alterations, while the CDI guide says builders risk may be used for existing structures under renovation. That difference is a reason to identify the old structure and new work explicitly.

Ask the homeowner insurer whether coverage continues, what notice or endorsement is required, and how the policy treats contractors, vacant periods, and materials. Compare a separate builders risk option and coordinate its effective date with the permanent home policy.