Who Buys a Builder's Risk Policy?
The builder or general contractor usually buys it, since it covers a home while under construction, not the homeowner.
Free to compare
New construction you're buying
If you're closing on a house still being built, the builder's risk policy belongs to the builder, not you. Your homeowners policy starts at closing, once the house is finished and the title transfers to your name.
Having a custom home built
If you hired a contractor to build on land you already own, the contractor usually carries builder's risk, but check your contract. Some builders require the homeowner to buy it instead, which changes what your lender asks for before closing.
What your lender actually needs
Lenders want proof of homeowners insurance starting the day you close, covering the finished house. If the home isn't finished yet, ask your lender directly whether they need a builder's risk certificate from the contractor in the meantime.
Timing your own policy
Buy your homeowners policy to start the closing date, not before. Starting it too early means paying for coverage on a house you don't own yet, and your insurer needs the completed home to set the dwelling coverage amount correctly.
Get the timing right
Your homeowners policy needs to start the day you close, covering the finished house at the right rebuild cost. Comparing quotes now means you're ready with proof of coverage before your lender's deadline.
What happens if the house isn't finished at closing
Sometimes a closing date arrives before a contractor has fully finished the house. Punch list items, a final inspection, or a certificate of occupancy might still be pending. Your lender will tell you whether they'll close anyway or wait. If they close, they may still require proof of homeowners insurance effective that day, even with work left to do. You end up owning the house while the builder's risk policy might still be the one covering ongoing construction risk, depending on what your contract says.
Sorting this out before closing saves trouble later. Ask the contractor directly whether their builder's risk policy stays active past the closing date, and for how long. Some policies end automatically once the home is sold. Others run until a set completion date written into the contract. If there's a gap where neither policy clearly covers the house, that's a problem your lender will also want resolved, since their collateral is the house itself.
Your own homeowners policy can usually still start on the closing date even if small items remain unfinished. What matters most to the insurer is whether the structure itself is complete enough to live in and insure at a set rebuild cost. A missing deck railing or unpainted trim typically doesn't stop coverage from starting. A missing certificate of occupancy might, since some insurers won't write a policy on a house that hasn't passed final inspection.
If you're unsure where things stand, ask the contractor for a written completion date. Ask your lender what proof they'll accept if that date shifts. Having both answers before you're a week out from closing gives you room to adjust your insurance start date instead of scrambling to find coverage the night before.
What if you bought the land and the house separately
Some buyers aren't purchasing a finished house or hiring a contractor to build one. They buy a lot, then bring in a builder under a separate contract, sometimes months apart. Who carries builder's risk in that setup depends entirely on what the construction contract says, not on who owns the land. Owning the lot doesn't make you responsible for insuring a structure that doesn't exist yet.
Read the construction contract before assuming anything. Some builders write their builder's risk coverage into the price and carry it themselves for the full build. Others, especially smaller contractors or owner-builder arrangements, expect the landowner to buy the policy and name the contractor as an additional insured. If you're acting as your own general contractor, hiring subcontractors directly instead of going through one builder, the responsibility almost always falls on you. There's no single contractor carrying a policy that covers the whole project in that case.
Construction loans make this matter even more. They often disburse money in stages as work gets done, and the lender will usually require proof of builder's risk coverage before the first draw goes out, regardless of who technically buys it. If that requirement isn't met, the lender can hold up funding, which stalls the build. Ask the loan officer directly what they need to see and from whom, since construction loan requirements vary more than standard mortgage requirements do.
Once the home is finished and ready for a certificate of occupancy, builder's risk coverage typically ends and your homeowners policy needs to take over. If you bought the land and contracted the build yourself, line up your homeowners policy to start the day construction wraps up, not the day you first broke ground. Matching that start date to the builder's completion estimate avoids a stretch where the finished house sits with no coverage at all.
Before closing
Check your closing date against the contractor's completion date in writing. If they match, line up your homeowners policy to start that day. If they don't, ask your lender what proof of coverage they'll accept in between.
