Can a Homeowner Buy Their Own Builder’s Risk Policy, or Does the Contractor Cover It? 

Starting a home construction or major renovation project in Athens, AL brings plenty of decisions, and figuring out who should buy a builder’s risk insurance policy is one that trips up many homeowners. The short answer is that multiple parties can choose to purchase it, but the right choice depends on your specific situation.

What Is Builder’s Risk Insurance?

Builder’s risk insurance may cover a structure, materials, tools, and other items during construction or renovation. It typically covers damage from fire, wind, theft and vandalism while the project is underway. Coverage can vary by policy, so be sure to review the terms carefully before work begins.

Who Can Purchase Builder’s Risk Insurance?

Both homeowners and general contractors can purchase a builder’s risk policy in Alabama. Some contractors include coverage as part of their contract, while others expect the homeowner to obtain it independently. Before signing anything, ask your contractor directly who is responsible for securing the policy. Leaving that question unanswered can create coverage gaps if something goes wrong mid-project.

Factors to Consider When Purchasing a Policy

Here are a few practical things to think through before choosing a policy:

• Project scope—Larger or longer projects may require higher coverage limits.
• Policy duration—Coverage typically needs to last the full length of construction.
• Existing homeowners insurance—Some policies may extend limited coverage to renovation projects, but check your policy for specifics.
• Lender requirements—If you have a construction loan, your lender may require a specific level of coverage.

Contact Us

Sorting out builder’s risk insurance before a project starts can help you avoid headaches later. Contact SOS Insurance Agency today to talk through your options and find coverage that fits your project in Athens, AL.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.