HO Insurance Won't Cover Your Remodel

You've hired a contractor. Permits are pulled. The crew shows up Monday morning and starts tearing out your kitchen or framing the addition you've been planning for three years. Your homeowners policy is current. You feel covered.

You're not.

What most Florida homeowners don't know — and what most contractors don't volunteer — is that a standard homeowners insurance policy contains exclusions that kick in the moment significant construction begins on your property. The insurer's logic is straightforward: an active construction site is a fundamentally different risk than a finished, occupied home. Open walls, exposed framing, materials staged on the lawn, workers coming and going, the structure in an unfinished state — all of it creates exposures that a homeowners policy was never designed to cover.

The same problem exists in reverse for new construction: a home that hasn't been built yet has no homeowners policy at all. There's nothing to cover the structure, the materials, or the soft costs if something goes wrong during the build.

Builder's risk insurance — also called course of construction insurance — exists specifically to fill this gap. It covers the structure and materials from the day construction begins until the day the certificate of occupancy is issued.

The exclusionary language varies by carrier, but the most common provisions that create coverage gaps during remodeling include:

Vacancy and unoccupancy clauses. If a remodel requires you to move out of the home — even temporarily — most homeowners policies reduce or eliminate coverage after 30 to 60 days of vacancy. A kitchen gut-renovation that takes three months could leave you in a vacancy clause situation without you realizing it.

Increased hazard exclusions. Standard homeowners policies exclude losses caused by a "change in conditions" that materially increases the risk. An active construction site — with open walls, temporary electrical, and combustible materials — almost certainly qualifies as an increased hazard under most policy definitions.

Property under construction exclusions. Some policies explicitly exclude coverage for structures "under construction" or for materials "intended for installation." This means the lumber staged in your driveway, the windows sitting in your garage, and the HVAC equipment waiting to be installed may have no coverage under your existing homeowners policy.

Contractor's liability doesn't protect you. Your contractor's general liability policy covers damage they cause to others — it doesn't cover your property. If a fire starts due to faulty wiring during the remodel and destroys your partially-finished addition, the contractor's GL policy won't pay to rebuild your home. That's your loss, not theirs.

For homeowners building from the ground up, the coverage gap is even more stark. A home that doesn't exist yet has no homeowners policy. There is no existing structure to insure, no policy in force, and no coverage for anything that happens on the lot during construction.

Consider what can go wrong on a Florida construction site before the certificate of occupancy is issued:

• A tropical storm or hurricane damages the partially-framed structure and destroys $80,000 worth of lumber, windows, and roofing materials staged on site.
• A fire in a neighboring property spreads to your under-construction home, destroying the framing and all installed mechanicals.
• Thieves strip the copper wiring and HVAC equipment from the structure overnight — a common occurrence in Florida.
• Vandals damage the partially-completed structure over a weekend.

Without a builder's risk policy, every one of those losses comes out of your pocket. Your construction loan doesn't cover it. Your contractor's insurance doesn't cover it. There is simply no coverage.

This is why virtually every construction lender in Florida requires a builder's risk policy as a condition of the loan before the first draw is released. The lender has a financial interest in the project and won't fund it without coverage in place.

A builder's risk policy is a property insurance policy written specifically for structures under construction. Coverage typically includes:

The structure itself — from the foundation up, at every stage of construction. If a covered peril damages the partially-built home, the policy pays to repair or rebuild to the point of loss.

Materials and supplies on site — lumber, windows, roofing materials, HVAC equipment, fixtures, and other components staged at the job site or in transit to it. This is the coverage that protects the $40,000 of impact windows sitting in your driveway from theft or storm damage.

Temporary structures — scaffolding, construction trailers, temporary fencing, and similar structures erected to support the build.

Soft costs — many policies include coverage for architect fees, engineering costs, permit fees, and lost rental income that result from a covered loss delaying project completion. If a hurricane sets your project back three months and you're paying rent elsewhere in the meantime, soft costs coverage can offset that expense.

Wind and named storms — in Florida, builder's risk policies include hurricane and tropical storm coverage, subject to a separate percentage deductible (typically 2–5% of the insured value). This is the coverage that protects your project during the June–November hurricane season.

What builder's risk does not cover: flood (a separate NFIP or private flood policy is required), earthquake, employee theft, mechanical breakdown, faulty workmanship, and bodily injury to workers (which is covered by workers' comp).

Either party can purchase a builder's risk policy, and the answer often depends on the nature of the project and who has the greater financial exposure.

For new construction, the property owner or developer typically purchases the policy, because they own the land and have the financial interest in the completed structure. The general contractor and all subcontractors are usually named as additional insureds.

For major remodels and additions, the arrangement varies. Some general contractors include builder's risk in their contract price and purchase the policy themselves. Others require the homeowner to provide it. The contract should specify who is responsible — and if it doesn't, ask before construction begins.

The critical point is that someone needs to have a builder's risk policy in force before the first day of construction. Trying to purchase coverage after a loss has already occurred is not possible. And assuming your homeowners policy will respond — without confirming with your carrier — is a gamble that Florida homeowners lose every hurricane season.

Builder's risk premiums in Florida typically range from $1.20 to $4.50 per $100 of construction value, with coastal projects commanding higher rates due to hurricane exposure.

For a $300,000 kitchen and addition remodel in an inland Florida county, a builder's risk policy might cost $2,400 to $5,400 for the project term. For the same project on the coast — in a named storm zone with a percentage wind deductible — the premium could be $5,400 to $13,500.

The premium is typically paid upfront for the full project term (usually 6 to 12 months), with the option to extend if the project runs long. Compared to the potential cost of an uninsured loss — a hurricane-damaged new build, a fire in a partially-completed addition, or a theft of staged materials — the premium is a small fraction of the exposure.

One important Florida-specific note: most carriers will not bind new builder's risk coverage once a named storm watch or warning is in effect for the project area. If you're starting a project in the spring or summer, placing coverage before hurricane season begins (June 1) is strongly advisable.

If you're planning a major remodel, addition, or new construction project in Florida, the conversation with your insurance agent needs to happen before the first nail is driven — not after something goes wrong.

The questions to ask are straightforward: Does my current homeowners policy cover the structure and materials during active construction? Does it cover me if I have to vacate the home during the remodel? What happens if a hurricane damages the project mid-construction?

In most cases, the honest answer is that your homeowners policy has significant gaps during construction — and a builder's risk policy is the right tool to fill them. It's not an optional add-on for cautious people. It's the coverage that exists specifically for this situation.

At Bright Coast Insurance, we work with multiple carriers to place builder's risk coverage for Florida homeowners and developers — residential remodels, custom home builds, additions, and commercial construction. We can typically quote and bind coverage within 24 hours for standard projects.

Does my homeowners insurance cover a kitchen remodel in Florida?

Likely not fully. Most Florida homeowners policies contain exclusions for structures under construction, increased hazards, and property intended for installation. A major remodel — especially one requiring you to vacate the home — can trigger these exclusions and leave you without coverage for the structure and materials during construction. A builder's risk policy fills this gap.

Do I need builder's risk insurance for a new home build in Florida?

Yes. A home under construction has no homeowners policy — there's nothing to insure yet. Builder's risk is the only coverage that protects the structure, materials, and soft costs during the construction period. Most Florida construction lenders require it before releasing the first draw.

Who buys the builder's risk policy — the homeowner or the contractor?

Either party can purchase it. For new construction, the owner typically buys the policy. For remodels, some contractors include it in their contract price; others require the homeowner to provide it. The contract should specify who is responsible. If it doesn't, confirm before construction begins.

Does builder's risk cover hurricane damage in Florida?

Yes — most Florida builder's risk policies include wind and named storm coverage, subject to a separate percentage deductible (typically 2–5% of the insured value). Note that most carriers will not bind new coverage once a named storm watch or warning is active, so placing coverage before hurricane season (June 1) is advisable.

How long does a builder's risk policy last?

Builder's risk policies are written for the expected project term — typically 6 to 12 months. Coverage ends at substantial completion (when the certificate of occupancy is issued), when the property is occupied, or when the policy expires — whichever comes first. Extensions are available if the project runs long.

Does builder's risk cover theft of materials from the job site?

Yes — theft of construction materials and supplies from the job site is a covered peril under most builder's risk policies. This includes staged materials like lumber, windows, HVAC equipment, and fixtures. Contractor's tools and equipment are typically excluded and require a separate inland marine or equipment floater policy.