Residential Builders Risk Insurance in South Carolina

Builders risk insurance or course of construction insurance - is a specialized policy designed to help protect a home or residential structure while it’s under construction. In South Carolina, it’s typically required by lenders on new construction loans, and strongly recommended for any homeowner, owner-builder, or residential contractor with significant materials or a partially built structure at risk.

Most standard builders risk policies exclude flood damage, which is a critical gap for residential construction projects in Goose Creek, Charleston, and other flood-prone areas of Berkeley and Dorchester County. Separate flood coverage through the NFIP or a private flood carrier may be needed. Coverage terms, conditions, and exclusions vary by policy and carrier.

Most builders risk policies are written for a specific project term, typically 3, 6, or 12 months, with the option to extend if the project runs over schedule. The policy generally ends when the home reaches completion and a standard homeowners policy takes over.

Many builders risk policies are designed to include coverage for theft of materials stored at the residential job site. Coverage limits, sub-limits, and conditions vary by carrier and policy form. Some policies may require materials to be secured to qualify. Coverage terms, conditions, and exclusions vary by policy and carrier.

Both homeowners and contractors can purchase residential builders risk policies. Owner-builders managing their own construction project in Summerville, Goose Creek, or anywhere in the Charleston area are eligible. Your lender may specify minimum coverage requirements if the project is financed.

A standard homeowners policy is designed to cover a completed, occupied home. It typically does not extend meaningful coverage to a structure under active construction. Builders risk fills that gap from groundbreaking through certificate of occupancy, when a homeowners policy can take over.

Builders risk policies cover the structure and materials, not the liability of subcontractors. Each subcontractor working on your residential project should carry their own general liability and workers compensation insurance. We can help you understand what to ask for from your contractors before work begins.

Builders risk premiums are typically calculated as a percentage of the total completed construction value. Rates vary by carrier, project type, and risk profile, but typically fall within a general range of 0.4% to 2% of total project value depending on construction type, location, project length, and carrier. A $400,000 custom home in Goose Creek will fall in a different range than a $150,000 renovation in Summerville. We’ll shop our carrier network to find competitive options for your specific residential project.

Most carriers allow you to renew a short term builders risk policy if the project isn’t complete by the original end date, but you typically need to request the new renewal term before the policy lapses. Letting it lapse and trying to reinstate creates a coverage gap. Contact us before your expiration date and we’ll help you manage the renewal.

Standard builders risk policies cover the structure under construction and associated materials. If you’re building an addition or renovating while the existing home is occupied, coverage for the existing structure may require a separate endorsement or your current homeowners policy may need to be coordinated carefully. Occupancy needs to be listed accurately. Coverage terms, conditions, and exclusions vary by policy and carrier.