Protect your construction project from costly setbacks before it’s too late.
Building or Remodeling? Your Regular Home Insurance May Not Be Enough.
Whether you’re building a custom home, adding a second story, renovating a rental property, or flipping a house for profit, one unexpected fire, theft, or storm could put your entire investment at risk.
That’s where Course of Construction Coverage comes in.
Also known as Builder’s Risk Insurance, Course of Construction Coverage is specifically designed to protect properties while they are under construction or undergoing major renovations.
If you’re planning any significant construction project, understanding this coverage can save you thousands—or even hundreds of thousands—of dollars.
What Is Course of Construction Coverage?
Course of Construction Coverage is a temporary property insurance policy that protects a building while it is:
- Being newly constructed
- Undergoing major renovations
- Being rebuilt after a fire or other loss
- Vacant during construction
- Used as a fix-and-flip investment
Unlike a standard homeowners insurance policy, this coverage is designed specifically for the unique risks that exist during construction.
Why Regular Home Insurance Isn’t Enough
Many homeowners assume their existing homeowners policy will cover renovations.
Unfortunately, that’s not always true.
Major remodeling changes the property’s risk profile because:
- Contractors are constantly entering and leaving.
- Valuable building materials are stored on-site.
- Electrical and plumbing systems may be partially disconnected.
- Portions of the home may be exposed to the elements.
- The home may become vacant for weeks or months.
Some insurance companies limit or exclude coverage during major renovations unless they are notified beforehand.
Without the proper policy, a claim could be delayed, reduced, or even denied.
What Does Course of Construction Coverage Protect?
A typical policy may cover:
The Building
Protection for the home or structure while it’s being built or remodeled.
Building Materials
Coverage for materials such as:
- Lumber
- Drywall
- Roofing materials
- Flooring
- Cabinets
- Windows
- Doors
- Fixtures
- Appliances waiting to be installed
Construction Supplies
Many policies also protect:
- Materials stored on-site
- Materials in transit
- Temporary storage locations (depending on the carrier)
Covered Causes of Loss
Most policies protect against sudden and accidental damage such as:
- Fire
- Lightning
- Wind
- Hail
- Theft
- Vandalism
- Smoke damage
- Explosion
- Falling objects
Coverage varies by carrier and policy.
Who Needs Course of Construction Coverage?
This insurance is ideal for:
Homeowners
Planning a major remodel, room addition, or whole-home renovation.
Real Estate Investors
Especially investors completing:
- Fix-and-flips
- Buy-rehab-sell projects
- BRRRR strategy properties
Builders
Custom home builders and speculative home builders.
Contractors
General contractors responsible for construction projects.
Property Developers
Developing residential or commercial properties.
Lenders
Banks often require Course of Construction coverage before funding construction loans.
Common Projects That Require This Coverage
Course of Construction insurance is commonly used for:
- New home construction
- Custom homes
- Kitchen remodels
- Bathroom remodels
- Room additions
- Garage conversions
- ADU construction
- Roof replacement
- Fire restoration
- Water damage reconstruction
- Structural repairs
- Investment property renovations
What Isn’t Covered?
Every policy is different, but common exclusions include:
- Faulty workmanship
- Poor construction quality
- Defective materials
- Design errors
- Mechanical breakdown
- Normal wear and tear
- Earthquake (unless added)
- Flood damage (unless purchased separately)
Always review your policy with your insurance advisor.
How Long Does Coverage Last?
Course of Construction policies are temporary.
Common policy terms include:
- 3 months
- 6 months
- 9 months
- 12 months
Many insurers allow extensions if construction takes longer than expected.
Builder’s Risk vs. Course of Construction
These two terms are often used interchangeably.
| Builder’s Risk | Course of Construction |
|---|---|
| Temporary property insurance | Temporary property insurance |
| Covers construction projects | Covers construction projects |
| Protects buildings under construction | Protects buildings under construction |
| Ends after project completion | Ends after project completion |
In most cases, they describe the same type of insurance.
Is Liability Coverage Included?
Usually no.
Course of Construction Coverage primarily protects the building and materials.
You may also need:
- General Liability Insurance
- Workers’ Compensation
- Commercial Auto Insurance
- Contractor’s Equipment Coverage
- Umbrella Liability Insurance
If you’re hiring contractors, make sure they carry their own liability insurance and workers’ compensation coverage where required.
Example Claim Scenario
Imagine you purchase a home to renovate before selling it.
Purchase Price: $700,000
Renovation Budget: $180,000
Three months into the project:
- A fire starts overnight.
- The roof is destroyed.
- Newly installed cabinets are damaged.
- Flooring and electrical work must be replaced.
Repair costs total $325,000.
Without Course of Construction Coverage, you could be responsible for the full cost. With the right policy, covered losses may be paid according to your policy terms, helping you keep your project on track.
Frequently Asked Questions
Can I live in the home during renovations?
Sometimes. It depends on the extent of the renovation and the insurance carrier’s guidelines.
Does it cover theft of building materials?
Many policies do, provided materials are secured and stored according to policy requirements.
Does it cover contractors’ tools?
Generally, no. Contractors should insure their own tools under their business insurance policies.
Is it required by my lender?
Many construction loans require Course of Construction or Builder’s Risk Insurance before funds are released.
Can I insure a fix-and-flip project?
Absolutely. This is one of the most common uses for Course of Construction Coverage.
Do I still need vacant home insurance?
Possibly. Depending on the property, renovation scope, and carrier, you may need a vacant property policy, Course of Construction coverage, or a policy that combines both. An experienced insurance broker can help determine the right solution.
Why Work with an Independent Insurance Broker?
Every construction project is different.
Factors that affect your insurance needs include:
- Property value
- Construction budget
- Vacancy status
- Location
- Contractor involvement
- Project timeline
- Wildfire exposure
- Occupancy during construction
An independent insurance broker can compare multiple admitted and specialty insurance companies to help you find coverage that fits your project and budget.
Protect Your Construction Project with StarWest Insurance Services
Whether you’re building a new home, remodeling your primary residence, adding an ADU, or completing a fix-and-flip investment, the right insurance can make all the difference when the unexpected happens.
At StarWest Insurance Services, we’ve been helping California homeowners, contractors, and real estate investors protect their projects since 1995.
We Can Help With:
- ✅ Course of Construction Coverage
- ✅ Builder’s Risk Insurance
- ✅ Fix-and-Flip Insurance
- ✅ Vacant Property Insurance
- ✅ Landlord Insurance
- ✅ Homeowners Insurance
- ✅ Commercial Property Insurance
- ✅ General Liability Insurance
Contact StarWest Insurance Services
📍 Westminster Office
13752 Goldenwest St.
Westminster, CA 92683
📍 Irvine Office
15375 Barranca Pkwy, Building L
Irvine, CA 92618
📞 Office: (714) 893-7271
📱 James C.Q. Banh: (714) 867-7799
🌐 Website: www.starwestinsurance.com
Get a Free Course of Construction Insurance Quote Today
Whether you’re renovating one home or managing multiple investment properties, our team can help you find the protection you need so you can build with confidence.