Builder's Risk Insurance in Texas
Protect your construction project with builder's risk insurance. Get coverage for buildings under construction, materials, and equipment during the vulnerable construction phase.
Start My QuoteConstruction projects are risky. While you're building, structures are exposed to weather, theft, vandalism, and other dangers—and regular property insurance won't cover a building that isn't finished yet. That's where builder's risk insurance comes in.
Also called course of construction insurance, builder's risk protects your investment during the construction phase. It covers the building itself, construction materials, equipment on-site, and temporary structures. Whether you're building a new home, a commercial building, or renovating an existing structure, this coverage is essential.
Most lenders require builder's risk insurance before they'll approve a construction loan. But even if you're paying cash, it's smart protection—one bad storm or theft incident could cost tens of thousands of dollars. We'll help you understand what's covered, how long coverage typically lasts, and find a policy that protects your project from start to finish.
What Builder's Risk Insurance Is
Builder's risk insurance, also called course of construction insurance, is specialized coverage designed for buildings and structures while they're under construction. It protects your investment during the vulnerable construction phase when buildings are exposed to risks without the protection of a completed structure.
This coverage protects the building or structure under construction, including work in progress, completed work, and materials that have been installed. It covers damage from fire, wind, hail, theft, vandalism, and other covered perils that could damage the project before completion.
Builder's risk insurance also covers construction materials and supplies, whether stored on-site or off-site. This is important because materials can be damaged or stolen before they're installed, and coverage helps protect your investment in materials.
Temporary structures like scaffolding, construction trailers, and temporary fencing are typically covered. These structures are essential for construction but are vulnerable to damage.
Equipment and tools used in construction may be covered, protecting valuable construction equipment from theft or damage during the project.
Some policies include coverage for soft costs, such as architectural fees, loan interest, or marketing costs if the project is delayed due to covered damage. This coverage helps protect against financial losses beyond just physical damage.
Who Builder's Risk Insurance Is For in Texas
Builder's risk insurance is essential for anyone involved in a construction project in Texas. Whether you're a property owner, contractor, or developer, specialized coverage protects your investment.
Property owners building new structures need builder's risk insurance to protect their investment during construction. Lenders typically require this coverage as a condition of construction loans.
Contractors and builders working on construction projects need coverage to protect their work, materials, and equipment. Builder's risk insurance helps ensure that damage during construction doesn't devastate the project.
Developers developing properties need comprehensive coverage for multiple projects or phases. Builder's risk insurance can be tailored to cover development projects from start to finish.
Anyone with a financial interest in a construction project needs protection. Whether you're the owner, contractor, lender, or investor, builder's risk insurance protects your financial stake in the project.
Property owners renovating existing structures may need builder's risk coverage if renovations are extensive enough that the property is exposed to construction risks.
Construction projects of any size benefit from builder's risk insurance, from small home additions to large commercial developments. The coverage protects your investment regardless of project scale.
Local Texas Conditions That Make Builder's Risk Insurance Relevant
Texas construction projects face unique conditions that make builder's risk insurance especially important. Understanding these local factors helps you choose appropriate protection.
Hurricane and severe wind risks affect many Texas construction projects, especially in coastal areas. Buildings under construction are particularly vulnerable to wind damage, making builder's risk insurance essential for protecting projects during hurricane season.
Hail and severe storm risks are common throughout Texas. Large hailstones can damage construction materials, partially completed structures, and equipment, making comprehensive coverage important.
Extreme heat in Texas can impact construction projects, potentially causing issues with materials, equipment, and worker safety. Builder's risk insurance helps protect against heat-related damage.
Flood risks exist in many Texas areas, especially in low-lying regions and near rivers. While standard builder's risk insurance may exclude flood damage, specialized coverage options may be available for flood-prone construction sites.
Theft and vandalism risks are present at construction sites, which are often unoccupied and may have valuable materials and equipment. Builder's risk insurance provides protection against theft and vandalism.
Tornado risks are present in Texas, and construction sites are vulnerable to tornado damage. Builder's risk insurance helps protect against tornado damage during the construction phase.
Long construction periods in Texas may extend the time projects are exposed to risks. Builder's risk insurance can be extended if projects take longer than expected, ensuring continuous protection.
How to Compare Builder's Risk Insurance Options in Texas
Comparing builder's risk insurance options helps you find coverage that protects your construction project while fitting your budget. Here's what to consider when evaluating different policies.
Start by determining the total project value, including materials, labor, and all construction costs. Builder's risk insurance is typically based on the completed project value, so accurate valuation is important.
Review coverage for construction materials, both on-site and off-site. Some policies only cover materials on the construction site, while others include materials stored off-site. Ensure your materials are covered wherever they're stored.
Evaluate coverage for temporary structures like scaffolding, construction trailers, and temporary fencing. These structures are essential for construction and should be covered.
Consider coverage for equipment and tools. Construction equipment can be expensive, and theft or damage can delay projects. Ensure equipment is covered.
Review soft costs coverage if you want protection for financial losses beyond physical damage. Soft costs coverage can help with loan interest, architectural fees, or marketing costs if the project is delayed.
Check the policy term and whether it can be extended if the project takes longer than expected. Construction projects often face delays, and you need coverage that can be extended.
Review what's covered and excluded. Most policies cover fire, wind, hail, theft, and vandalism, but flood damage may be excluded. Understand exclusions before choosing a policy.
Research the insurance provider's experience with construction projects. Companies that specialize in builder's risk insurance often provide better service and more appropriate coverage.
Builder's risk insurance options are available throughout Texas. Explore construction insurance in Houston, builder's risk coverage in Dallas, course of construction insurance in Austin, and construction protection in San Antonio, or view all Texas service areas to find coverage near you. Consider pairing with commercial property insurance for completed buildings, and explore general liability insurance for construction operations.
Typical Costs and Factors for Builder's Risk Insurance in Texas
Builder's risk insurance costs in Texas vary based on several factors. Understanding these factors helps you find the best value for your construction project.
Total project value significantly impacts cost. Builder's risk insurance is typically calculated as a percentage of the completed project value, often ranging from 1% to 5%. Higher-value projects cost more to insure.
Construction type affects pricing. Different construction types (wood frame, concrete, steel) have different risk profiles, which affects premiums. Some construction types may qualify for better rates.
Location within Texas affects rates. Coastal areas prone to hurricanes may have higher premiums due to increased wind risk. Urban areas may have different rates than rural areas based on local risks.
Project duration impacts cost. Longer construction periods mean more time exposed to risks, which can increase premiums. Some policies charge based on project duration.
Coverage options affect pricing. Policies with soft costs coverage, off-site materials coverage, or higher coverage limits cost more than basic policies. Choose options that match your needs.
Deductible choice impacts premiums. Higher deductibles typically lower premiums but mean you'll pay more out of pocket if you file a claim. Choose a deductible you can afford.
Insurance provider matters. Different companies use different formulas to calculate risk and set prices, so rates can vary significantly for the same project. Comparing quotes helps you find competitive rates.
Common Exclusions for Builder's Risk Insurance in Texas
Builder's risk insurance policies typically exclude certain situations and types of damage. Understanding these exclusions helps you know what's covered and what requires additional coverage.
Flood damage is often excluded. Standard builder's risk insurance may not cover flood damage, which typically requires separate flood insurance. This is important in Texas, where many construction sites face flood risks.
Normal wear and tear is excluded. Maintenance, routine repairs, and gradual deterioration are your responsibility. Insurance covers sudden, accidental damage, not normal aging or wear.
Damage from faulty workmanship or design may be excluded. While builder's risk insurance covers damage from covered perils, it typically doesn't cover the cost of fixing faulty work or design errors.
Intentional damage is excluded. Damage you cause intentionally or through illegal activities is not covered.
Some policies exclude certain types of equipment or require additional coverage for specialized equipment. Review policy terms to understand equipment coverage and exclusions.
Coverage typically ends when construction is complete and the building is occupied or turned over to the owner. You'll need to replace builder's risk insurance with permanent property insurance once construction is finished.
Some policies exclude coverage for certain construction phases or require specific conditions to be met. Review policy terms to understand coverage limitations.
Frequently Asked Questions About Builder's Risk Insurance in Texas
What is builder's risk insurance and why do I need it in Texas?
Builder's risk insurance, also called course of construction insurance, provides coverage for buildings and structures while they're under construction. In Texas, builder's risk insurance protects against damage to the building, construction materials, and equipment during the construction process. Standard property insurance doesn't cover buildings under construction, so builder's risk insurance is essential for construction projects. Coverage typically includes protection against fire, wind, hail, theft, vandalism, and other perils that could damage the project before completion. Builder's risk insurance is typically required by lenders financing construction projects and is essential for protecting your investment during the vulnerable construction phase.
What does builder's risk insurance cover in Texas?
Builder's risk insurance in Texas typically covers the building or structure under construction, construction materials and supplies stored on-site or off-site, temporary structures like scaffolding or construction trailers, equipment and tools used in construction, and may include coverage for soft costs like architectural fees or loan interest if the project is delayed. Coverage typically includes protection against fire, wind, hail, theft, vandalism, and certain weather events. Some policies also cover damage to existing structures being renovated. Review policy details to understand specific coverage, exclusions, and whether materials stored off-site are covered.
How much does builder's risk insurance cost in Texas?
Builder's risk insurance costs in Texas vary based on the project's total value, construction type, location, project duration, coverage options, and the insurance provider. Premiums are typically calculated as a percentage of the completed project value, often ranging from 1% to 5% of the total project cost. Higher-value projects, projects in high-risk areas, or longer construction periods typically cost more to insure. Location within Texas affects rates, with coastal areas potentially having higher premiums due to hurricane risk. Comparing quotes from multiple providers helps you find competitive rates.
Who needs builder's risk insurance in Texas?
Builder's risk insurance is needed by property owners building new structures, contractors and builders working on construction projects, developers developing properties, and anyone with a financial interest in a construction project. Lenders financing construction projects typically require builder's risk insurance as a condition of the loan. Even if not required, builder's risk insurance is essential for protecting your investment during the vulnerable construction phase when buildings are exposed to weather, theft, and other risks without the protection of a completed structure.
How long does builder's risk insurance last in Texas?
Builder's risk insurance typically lasts for the duration of the construction project, from when construction begins until the project is completed and occupied or turned over to the owner. Policies are usually written for a specific term (often 12-24 months) but can be extended if the project takes longer than expected. Once construction is complete, builder's risk insurance should be replaced with permanent property insurance. It's important to ensure coverage remains in place until the project is fully completed and any required certificates of occupancy are obtained.
Ready to Protect Your Construction Project?
Compare builder's risk insurance options available in Texas and continue through the quote process to find coverage that protects your construction investment from start to finish.
Start My Quote