Protect your home, renovation, or investment property while construction is underway.
If you’re planning a major construction project, your standard homeowners insurance may not provide enough protection. Course of Construction Insurance (also called Builder’s Risk Insurance) is designed to protect your property while it’s being built, remodeled, or undergoing major repairs.
Whether you’re a homeowner, contractor, or real estate investor, understanding when you need this coverage can save you from costly financial losses.
What Is Course of Construction Insurance?
Course of Construction Insurance is a temporary property insurance policy that protects a building while construction or major renovations are in progress.
It helps cover damage to the structure and many building materials before the project is complete.
When Do You Need Course of Construction Insurance?
1. You’re Building a New Home
If you’re constructing a custom home from the ground up, this coverage is essential.
It protects:
- Foundation
- Framing
- Roofing
- Plumbing
- Electrical systems
- Building materials
- Partially completed structures
Many construction lenders require Builder’s Risk insurance before releasing loan funds.
2. You’re Doing a Major Home Renovation
If your renovation significantly changes the structure of your home, you should consider Course of Construction coverage.
Examples include:
- Complete kitchen remodel
- Whole-home renovation
- Second-story addition
- Major room addition
- Structural wall removal
- Extensive plumbing or electrical upgrades
Some homeowners insurance policies may limit or exclude coverage during major renovations if your insurer is not notified.
3. You’re Flipping a House
Fix-and-flip investors face unique risks.
During renovations, a vacant property may be exposed to:
- Fire
- Theft
- Vandalism
- Storm damage
- Water damage
- Construction accidents
Course of Construction Insurance helps protect your investment until the property is ready to sell.
4. You’re Rebuilding After a Fire or Major Loss
If your home has been damaged by:
- Fire
- Windstorm
- Falling trees
- Water damage
- Vehicle impact
and major reconstruction is needed, Course of Construction coverage may be appropriate while repairs are underway.
5. You’re Building an ADU
Adding an Accessory Dwelling Unit (ADU)?
Whether it’s:
- Detached ADU
- Garage conversion
- Backyard cottage
- Guest house
Builder’s Risk insurance can protect the new structure and materials during construction.
6. Your Home Will Be Vacant During Construction
Many homeowners policies restrict coverage if a home is vacant for an extended period.
If your home will be empty while renovations are completed, your insurance broker may recommend:
- Course of Construction Insurance
- Vacant Home Insurance
- Or a combination of both, depending on the project and insurer
7. You’re Converting a Property
You may need this coverage if you’re converting:
- Office to residential
- Single-family home to duplex
- Warehouse to lofts
- Commercial building to apartments
These projects carry different risks than standard occupancy.
8. You’re Renovating a Rental Property
Landlords often renovate properties between tenants.
Major improvements such as:
- New roof
- Complete remodel
- Electrical upgrades
- Plumbing replacement
- Structural repairs
may require Course of Construction coverage until the work is finished.
9. Your Lender Requires It
Construction lenders frequently require Builder’s Risk insurance before they will:
- Close the loan
- Release construction funds
- Approve draw requests
This protects both you and the lender’s financial interest during the project.
Projects That Commonly Need Course of Construction Insurance
- ✅ New home construction
- ✅ Custom homes
- ✅ Fix-and-flip properties
- ✅ ADU construction
- ✅ Garage conversions
- ✅ Kitchen remodels
- ✅ Bathroom remodels
- ✅ Room additions
- ✅ Roof replacements
- ✅ Fire restoration
- ✅ Water damage reconstruction
- ✅ Structural repairs
- ✅ Investment property renovations
- ✅ Commercial remodeling
What Does It Cover?
Depending on the policy, Course of Construction Insurance may cover:
- Fire
- Lightning
- Wind
- Hail
- Theft of building materials
- Vandalism
- Smoke damage
- Certain water damage (subject to policy terms)
- Materials in transit or stored on-site (varies by carrier)
Coverage varies by insurer, so review your policy carefully.
What Doesn’t It Cover?
Most policies do not cover:
- Poor workmanship
- Faulty design
- Construction defects
- Employee theft
- Mechanical breakdown
- Earthquake (unless added)
- Flood (unless added separately)
Example
A homeowner purchases a property for $850,000 and invests $250,000 in a complete renovation.
Halfway through the project:
- A fire destroys the new roof.
- Custom cabinets are damaged.
- Electrical work must be redone.
Total damage: $375,000.
Without Course of Construction Insurance, these costs could come directly out of pocket. With the proper policy, covered losses may be paid according to the policy terms, helping keep the project on schedule.
Frequently Asked Questions
Is Course of Construction Insurance the same as Builder’s Risk Insurance?
Yes. These terms are commonly used interchangeably to describe insurance that protects buildings under construction or major renovation.
Can I live in the home during construction?
Sometimes. It depends on the extent of the work and the insurance carrier’s underwriting guidelines.
Do contractors need their own insurance?
Yes. Contractors should carry their own General Liability and Workers’ Compensation insurance where required. Course of Construction Insurance protects the property itself, not the contractor’s liability.
Does it cover stolen tools?
Typically no. Contractors are usually responsible for insuring their own tools and equipment.
How long does coverage last?
Policies are commonly written for 3, 6, 9, or 12 months, with extensions available if construction takes longer than expected.
Protect Your Project Before Construction Begins
Construction projects involve significant investments, and unexpected losses can happen at any stage. Having the right insurance before work begins can help protect your property, materials, and budget from costly setbacks.
At StarWest Insurance Services, we help homeowners, builders, contractors, and real estate investors find the right Course of Construction and Builder’s Risk coverage for projects across California—including new construction, major remodels, ADUs, and fix-and-flip properties.
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
Get a Free Course of Construction Insurance Quote Today
Planning a construction project? Contact StarWest Insurance Services to compare coverage from multiple admitted and specialty carriers and protect your investment from day one.