Builder's Risk Insurance Calculator

About the Builder's Risk Insurance Calculator

Builder's risk insurance (also called course of construction insurance) protects buildings under construction or major renovation from damage due to fire, wind, theft, vandalism, and other covered perils. It covers the structure, materials on-site, and materials in transit.

This specialized policy is typically purchased by the property owner, general contractor, or both. Coverage begins at the start of construction and expires when the project is complete or the permanent homeowners policy takes effect. Premiums are calculated as a percentage of the total project value.

It gives educational estimates for builder's risk premiums. Actual costs depend on the insurer, construction type, location, and project specifics. Always get actual quotes before starting a construction project.

When This Page Helps

A construction project represents a major financial investment. Without builder's risk insurance, a fire, storm, or theft could cost you the full project value with no recourse. This calculator helps you budget for this essential cost.

How to Use the Inputs

1. Enter the total project value (including materials and labor).
2. Select the construction type (wood frame, masonry, steel frame).
3. Enter the project duration in months.
4. Select whether the project is new construction or renovation.
5. Review the estimated builder's risk premium.

Example Calculation

Tips & Best Practices

• Builder's risk policies typically cost 1–4% of the project value, depending on construction type and location.
• Wood frame construction costs more to insure than masonry or steel frame.
• Ensure the policy covers theft of materials, both on-site and in transit.
• Builder's risk policies usually expire when occupancy begins or after 12 months, whichever comes first.
• Major renovations (not just cosmetic) should have builder's risk coverage, as standard homeowners may exclude active construction.
• These are educational estimates; get actual builder's risk quotes before committing to a construction project.

New Construction vs. Renovation Coverage

New construction builder's risk starts from the ground up and covers the increasing value as construction progresses. Renovation builder's risk must also account for the existing structure, which may need to be covered under a separate or integrated policy. Renovation projects often cost 15–25% more to insure.

What Builder's Risk Doesn't Cover

Typical exclusions include employee injuries (covered by workers' comp), faulty design or workmanship, normal wear and tear, mechanical breakdown, government actions, and losses due to the contractor's failure to secure the site. Read the exclusions carefully.

Choosing the Right Builder's Risk Policy

Get quotes from at least three insurers. Compare covered perils, deductibles, soft cost coverage, transit coverage, and extension terms. For large projects, consider a policy with replacement cost coverage rather than actual cash value, even though it costs slightly more.

Frequently Asked Questions

• What does builder's risk insurance cover?

  Builder's risk covers the building under construction, materials and supplies on-site, materials in transit, temporary structures (scaffolding, construction trailers), and sometimes soft costs (architect fees, permits, loan interest) if construction is delayed by a covered loss. Coverage applies to damage from fire, wind, theft, vandalism, and other named perils specified in the policy. It is important to review the specific exclusions, as flood and earthquake damage typically require separate endorsements.

• Who needs builder's risk insurance?

  Anyone building a new home or doing a major renovation should have builder's risk coverage. It's typically required by lenders issuing construction loans. The property owner, general contractor, or both can be named insureds.

• How is builder's risk different from a contractor's general liability?

  Builder's risk covers property damage to the project itself (the building, materials). General liability covers bodily injury and property damage to third parties. A contractor should have both, but they protect against different risks.

• Does builder's risk cover natural disasters?

  Standard builder's risk covers fire, lightning, wind, hail, and vandalism. Flood and earthquake are typically excluded and require separate coverage. In coastal areas, wind/named storm coverage may also be excluded or have higher deductibles.

• When does builder's risk expire?

  Builder's risk policies expire at the earliest of: project completion, occupancy of the building, the policy expiration date (usually 12 months), or cancellation. You need to transition to a standard homeowners or commercial property policy upon completion.

• Can I extend a builder's risk policy?

  Yes, most policies can be extended if construction takes longer than expected. Extensions typically cost a prorated amount of the original premium (e.g., 1/12 of the annual premium per additional month). Notify your insurer before the original policy expires.