Estimate builder's risk insurance costs for new construction or major renovations. Calculate premiums based on project value, duration, and construction type.
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.
This calculator provides 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. Whether you are a beginner or experienced professional, this free online tool provides instant, reliable results without manual computation. By automating the calculation, you save time and reduce the risk of costly errors in your planning and decision-making process.
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. Having a precise figure at your fingertips empowers better planning and more confident decisions.
Base Rate = 1–4% of total project value (annualized) Construction Type Factor = Wood (1.2) / Masonry (1.0) / Steel (0.85) Duration Factor = Project Months / 12 Renovation Surcharge = 1.15–1.25 (if applicable) Premium = Project Value × Base Rate × Type Factor × Duration Factor × Renovation Factor
Result: $6,000 for 10-month policy
Total project value of $400,000 at a 2% base rate = $8,000 annualized. Wood frame factor (1.2×) = $9,600/year. For 10 months: $9,600 × (10/12) = $8,000. With competitive pricing and new construction factor ≈ $6,000 total premium.
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.
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.
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.
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.
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.
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.
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.
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.
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.