Do Builder's Risk Policies Cover Theft?
Often yes, for stolen building materials or equipment on site, but limits and exclusions vary by policy.
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What the policy actually names
Some builder's risk policies cover theft of materials and tools on site. Others only cover the structure itself. The declarations page or policy form states this directly. If theft isn't listed as a covered cause of loss, it isn't covered, no matter what the agent said verbally.
Materials vs. installed property
Lumber sitting in a driveway is treated differently than a furnace already installed in the house. Many policies cover installed materials more readily than materials staged on site before they're built in. Unsecured stockpiles are a bigger theft target, and insurers price that risk accordingly.
Signs of forced entry
Insurers often require evidence of a break-in, like a broken lock or a forced door, before paying a theft claim. Tools or materials that go missing with no sign of forced entry get denied more often than ones taken in a clear break-in.
This isn't your homeowners policy
Builder's risk covers the property during construction and typically ends at completion. The homeowners policy your lender wants for closing starts afterward. These are separate coverages. A gap in theft protection during construction won't be fixed by the homeowners policy you're arranging now.
Builder's risk and the homeowners policy a lender wants at closing are two different things covering two different periods, and mixing them up leaves gaps. Once the house is built and ready for closing, what matters is dwelling coverage that matches the actual cost to rebuild, not what the house sold for. Comparing policies now, before the binder is due, is the way to check that number is right.
Why this matters for the policy you're arranging now
If a builder is still finishing work on the house before closing, builder's risk may still be in effect even though the homeowners policy your lender wants is being set up at the same time. The two can overlap briefly, but they don't replace each other. Builder's risk follows the construction. Your homeowners policy follows you, starting the day you own the house and need coverage in place for the closing.
Theft after you move in is a different question entirely, and it's covered under personal property coverage on your homeowners policy, not dwelling coverage. Dwelling coverage pays to rebuild the structure if it's damaged. Personal property coverage pays for your belongings, the things a thief would actually take once you're living there. Your declarations page lists a personal property limit, usually a percentage of your dwelling coverage, and that's what applies if your own things are stolen after closing.
If the house you're buying was recently built, ask whether the builder's risk policy is still active and when it ends. If it lapses before your homeowners policy starts, there's a window with no theft coverage on the property at all. This is worth confirming before closing, not after, since a builder's risk policy belongs to the builder or developer, not to you, and you can't file a claim against a policy you were never named on.
None of this changes what your lender is asking for. They want proof of a homeowners policy with dwelling coverage that matches what it would cost to rebuild the house, not what you're paying for it. That number comes from a replacement cost estimate, often run by the insurer itself, and it's worth checking against the builder's own cost figures if the house is newly built. Getting that number right now means not finding out later, after something happens, that the payout falls short of what rebuilding actually costs.
What if the house was never covered by builder's risk at all
Not every house passes through a builder's risk policy. If the home was built years ago and has changed hands since, any builder's risk coverage ended long before the current sale. Theft protection has run through homeowners policies for every owner in between. In that case there is no gap to check. The construction-period coverage has no bearing on a resale, and the only policy that matters is the homeowners policy starting at your closing.
Where this gets confusing is with spec homes and new construction bought directly from a builder. The builder typically holds the builder's risk policy through the entire build, and depending on the contract, through the final walkthrough or even up to closing. Some builders end coverage the moment the certificate of occupancy is issued, before the sale closes. Others carry it until the keys change hands. The contract of sale or the builder should say which. It's worth asking directly rather than assuming.
If nobody can say when builder's risk coverage ends, treat the homeowners policy start date as the only date that matters. Make sure it's set for the day you take possession, not the day you sign the contract. A policy that starts a few days late because of a slow binder leaves the same kind of gap as a builder's risk policy that ends early. Lenders usually want proof of coverage effective at or before closing specifically to close this window, so the date on the binder is not a formality.
None of this requires tracking down the builder's insurer or reading their policy. It requires confirming one date, when construction-period coverage ends, and matching it against another, when the homeowners policy begins. If those two dates meet or overlap, the house is covered against theft the entire time. If there's a space between them, that's the only scenario where asking about builder's risk theft coverage actually changes what needs to happen before closing.
One date to pin down before closing
Check that your homeowners policy's start date lines up with the day you take possession, not the day you sign. If construction just finished, ask the builder when their coverage ends.
