Two policies cover homes: homeowners covers a finished home, builders risk covers a home under construction. Renovation falls in the seam. The moment construction starts, your homeowners carrier steps off. Standard builders risk policies were built for new construction and treat existing structures poorly. The right policy for a renovation covers the existing house, the new work, and the full project term in one form.
That’s the kind of policy we shop. The rest of this page is the detail you need to buy the right one. For the broader picture, our homeowner builders risk hub walks through the full segment.
Why renovations need different coverage than new builds
Most builders risk forms were drafted with ground-up construction in mind. The policy starts at zero and grows as materials and labor get added. That model breaks on a renovation because there’s already a $400K or $1.2M structure standing on the lot before anyone swings a hammer.
A proper renovation policy does three things a stock new-construction form fumbles.
It covers the existing structure. The house you already own gets pulled into the policy at its current replacement value, and the renovation work is added on top. Without it, a fire during a kitchen demo destroys framing and finishes the contractor wasn’t even working on, and the homeowners carrier denies the claim because construction was active.
It accounts for soft costs that run heavier in renovations. Architects, engineers, permit fees, and finish allowances run 18 to 25 percent of project cost on a renovation versus 10 to 15 percent on a new build. If a covered loss delays the project, those costs keep accruing. Soft cost endorsements pay for them.
It handles vacancy correctly. On a gut renovation or major remodel, you usually move out. Most homeowners policies start applying vacancy exclusions after 30 or 60 days, which strips coverage right when risk peaks. A renovation builders risk policy is built to insure an unoccupied structure under construction, no vacancy clause to fight.
There’s also the 25 percent rule. Most carriers use a project-cost-to-home-value ratio to decide whether builders risk is required. If your renovation budget runs more than 25 percent of your home’s insured value, you almost certainly need a separate builders risk policy. Below that, your homeowners carrier may handle the work with a renovation endorsement, though you should call them first. The NAIC consumer alert on home construction insurance gaps covers the regulator view. The builders risk vs homeowners breakdown covers HO-3 form language.
Renovation projects we shop coverage for
The renovation policies we place through BuildersRiskNerd cover the full range of residential renovation, cosmetic to structural. Pricing and underwriting differ by project type, and the NAHB Remodelers Council tracks industry-level cost data that lines up with what we see on submissions.
Kitchen remodels
Project values run $30K to $150K. Premiums fall in the $400 to $900 range for a 6-month term. A Sacramento homeowner doing a $90K kitchen with the family staying in the house paid $625 for a 6-month policy with standard endorsements. Common claims are water damage from plumbing rough-ins gone sideways and theft of installed but unsecured appliances over a weekend.
Bathroom renovations
Bathrooms run $15K to $80K with premiums between $300 and $700. The risk profile is dominated by water damage during demolition and pipe replacement. Tile work and fixture installs draw a few theft claims. A Brooklyn homeowner redoing two upstairs bathrooms in a $1.4M brownstone paid $480 for a 4-month policy.
Additions and second-story pop-ups
Project costs typically run $80K to $400K with premiums between $1,000 and $3,500 depending on the addition’s size relative to the existing structure. A Charlotte homeowner adding a 600-square-foot primary suite to a 1980s ranch paid $1,850 for a 9-month policy with soft costs and increased debris removal. The big underwriting question is how the addition ties into the existing roof and walls. When the existing roof opens up for a pop-up, the entire house sits exposed to weather until the new structure is dried in. That open-roof window drives premium more than construction value alone.
Gut renovations
Gut jobs strip the home to studs, sometimes to the foundation. Project values run $150K to $1.5M and premiums land in the $2,500 to $8,000 range, sometimes higher on luxury or historic homes. Vacancy is automatic. Existing structure coverage becomes the central underwriting concern. A Denver couple doing an $850K whole-home gut with a 12-month timeline paid $4,200 for a policy with the existing structure endorsement at full replacement value, soft costs, and ordinance or law. Cost ranges by project size breaks down the math.
Historic restorations
Historic renovations are their own underwriting category. Original materials and craftsmanship resist standard replacement methods, so replacement cost calculates differently. Carriers usually require an agreed-value endorsement that locks in a number agreed by you, the carrier, and often an appraiser. Premiums run 25 to 50 percent higher than a similar non-historic gut job. A Boston homeowner restoring a 1910 brownstone paid $7,800 for a 12-month policy with agreed-value, increased ordinance or law, and a scheduled fine arts limit on original millwork. The National Trust for Historic Preservation has guidance worth reading before you call a broker.
Coverage details specific to renovations
A renovation builders risk policy is built around a stack of coverages that often go missing on a stock new-construction form. The big five for renovation work:
Existing structure endorsement. Pulls the existing house into the policy at replacement value. Without it, only the renovation portion is insured, and a covered loss to existing framing or finishes goes unpaid.
Debris removal coverage on demolition. Most base policies include a small debris removal sub-limit, often $25K. Renovations frequently blow through that, especially gut jobs with multiple dumpsters. Increased debris removal is a common endorsement and adds 2 to 4 percent to premium.
Theft of installed materials and fixtures. Cabinets, vanities, faucets, and high-end appliances tend to walk off renovation sites because they’re installed before the home is secured. Make sure your policy covers theft of installed materials, not just materials in storage. The wording matters.
Water damage during plumbing rough-in. Most renovation water claims are not the dramatic burst pipe at 2 a.m. They’re the slow leak from a soldered joint that ran through subflooring for three days while no one was on site. A good renovation form covers resulting damage. Cheap forms exclude it.
Fire risk during hot work. Welding, soldering, and torch-down roofing on a renovation site cause more fires than electrical issues. Some policies require a hot work permit and notification before any torch use. Read this section of your form carefully. Our endorsements that handle hot work and LEG 3 walks through the hot work and LEG 3 endorsements that handle this exposure.
When to add endorsements for your renovation
Most renovation projects need at least one endorsement beyond the base form. A few specific signals tell you when:
Add the soft costs endorsement when your project includes architect or engineering fees over $25K, when you’re carrying a construction loan with interest costs that keep accruing if the project is delayed, or when you’ve prepaid permits and design work you’d lose if the project had to restart.
Add the ordinance or law endorsement when renovating a home built before 1990. Building codes have changed materially since then, and a covered loss often triggers code-upgrade requirements that the base form leaves uninsured.
Add increased debris removal for gut jobs, additions over 800 square feet, or any project with asbestos, lead, or mold remediation in scope.
Skip the agreed-value endorsement on a standard kitchen or bath remodel. You’re probably overpaying. Skip flood and earthquake endorsements unless you’re in FEMA flood zones A or V or a high-seismic area, where standalone coverage usually beats the builders risk endorsement.
If you’re managing the renovation yourself, the underwriting picture changes. Our owner-builder builders risk segment covers that scenario.
What to do when your project changes scope
Renovations almost always grow. The contractor opens up a wall and finds knob-and-tube wiring. The homeowner decides to redo the master bath while they’re at it. Scope grows, and so does the value at risk.
The policy stays at the limit listed on the declarations page. If your $200K kitchen renovation grows into a $340K kitchen-plus-master-suite project, the extra $140K sits uninsured until you raise the limit. So call the broker.
Two rules. First, build a 10 to 15 percent buffer into your initial limit. Carriers keep the unused premium if you come in under, but they apply a coinsurance penalty if you’re underinsured at the time of loss. Second, when scope grows by more than 15 percent, call us before the work starts. Mid-policy increases require a quick endorsement, the premium prorates for the remaining term, and the certificate gets reissued for your lender. Usually same-day.
Term extensions work the same way: call us before the term expires and we extend in 3-month increments. After a lapse, replacement gets harder and more expensive.
What renovation builders risk costs
Renovation pricing varies more than new construction because the existing structure value, project scope, and renovation type all move premium independently. Three honest ranges based on policies we’ve quoted:
Small remodels: $400 to $900. Single-room kitchen, bath, or finished basement. Project values under $75K. 6-month term. Standard endorsements only.
Mid-size renovations: $1,000 to $2,500. Multi-room remodels, second-story pop-ups, smaller additions. Project values $75K to $300K. Usually a 9-month term. May include soft costs and increased debris removal.
Gut renovations and large additions: $2,500 to $8,000. Whole-home gut jobs, large additions, or historic restorations. Project values $300K to $1.5M. 12-month term standard. Existing structure endorsement at full replacement value, soft costs, ordinance or law, and sometimes agreed-value.
The variables that move you up or down: existing structure replacement value, total insured limit, term length, deductible (most policies offer $1,000, $2,500, or $5,000), construction type, project location, and protective measures on site. A locked, fenced, monitored site shaves 10 to 20 percent off premium. An unfenced site with materials stacked outside adds the same.
Get a renovation builders risk quote through BuildersRiskNerd. You’ll need the project address, scope summary, total insured value, and projected start and end dates. Most renovation quotes bind same-day with a certificate emailed to you and your lender within an hour.
Frequently asked questions
Does my homeowners policy cover a kitchen remodel?
For the work in progress, almost never. Your HO-3 may cover a finished renovation once the home is reoccupied, but during construction the work-in-progress is excluded. The Insurance Information Institute confirms the same. A separate builders risk policy is the right answer for any kitchen remodel above $25K or one that displaces you from the home for more than two weeks.
What about a home addition? Does my homeowners policy cover that?
No. Most HO-3 forms exclude additions until the certificate of occupancy issues. Builders risk covers the addition during construction. Your homeowners policy resumes once the project finishes and the home is reoccupied.
My contractor said they have insurance. Doesn’t that cover the building?
Your contractor’s general liability covers their liability for damage they cause. It covers neither the building, your existing structure, nor the new work. If a fire starts and the contractor isn’t legally liable, GL pays nothing. Builders risk covers the property regardless of fault. The builders risk vs general liability comparison walks through this in detail.
Do I need builders risk insurance for a historic home renovation?
Yes, and you almost always need extra endorsements. Historic homes typically require an agreed-value endorsement, increased ordinance or law coverage, and sometimes a scheduled fine arts limit on architectural features. Plan for premium 25 to 50 percent above a similar non-historic project of the same value.
BuildersRiskNerd is a brand name of ContractorNerd Insurance Services, LLC, a licensed insurance producer (CA License #6015566). All insurance products and services are offered through ContractorNerd Insurance Services, LLC. We’re a broker, not an insurer. Policies are underwritten by admitted and non-admitted carriers. This page is informational and does not constitute a quote, binder, or insurance contract. State availability and policy terms vary. Premium ranges are illustrative based on past quotes and may not match your project.