Arizona
Builder's risk insurance for Arizona flips and renovations.
A property under renovation is at its most exposed: open walls, materials on site, crews coming and going. Builder's risk is written for exactly that stretch.
In short
Builder's risk insurance covers a property while it is being built or renovated, which can include the structure, the work in progress, and materials on site, depending on the policy. Arizona flippers and BRRRR investors often use it during a rehab, then switch to a landlord policy before the first tenant moves in.
- Limits are usually based on the value of the finished project, not the purchase price.
- It usually doesn't include liability; that typically comes from general liability and your contractors' policies.
- Ask every contractor for a certificate of insurance before work begins.
- Plan the switch to a landlord policy before the work starts, so there's no gap.
What builder's risk covers
Builder's risk insures a building while it's being built or renovated. Depending on the policy, it can include:
- The structure and the work in progress, for covered losses like fire, wind, and theft.
- Materials and supplies stored on site, and sometimes in transit or at another location.
- Soft costs on some policies, such as extra interest or permit fees after a covered delay.
It usually doesn't include liability for injuries; that typically comes from your general liability policy and your contractors' policies. It also doesn't cover faulty work or normal wear and tear.
How the limit is set
Builder's risk limits are usually based on the value of the finished project, not the purchase price. Carriers set the rules, so confirm how yours wants the limit calculated before the policy starts.
Why a regular policy often falls short
Most landlord and homeowners policies weren't written for a home that's empty and under construction. Many limit coverage once a home is vacant, and renovation adds risks those policies don't expect. If you're mid rehab on a standard policy, it's worth a look now.
From rehab to rental, with no gap
The handoff is where projects get exposed. Plan it before the work starts: builder's risk (or vacant coverage) during the rehab, then a landlord policy effective before the first tenant moves in, with loss of rents and a dwelling limit based on the finished home. Our free Rehab to Rental Coverage Checklist covers every step, and the free Portfolio Ledger flags any rehab property that isn't on builder's risk or vacant coverage.
Quotes and coverage are subject to underwriting and carrier approval. Everhold Insurance is a licensed insurance agency in the State of Arizona. License # 3004512575.
Questions Arizona flippers ask
Straight answers.
Does my contractor's insurance cover my property?
Usually not. Your contractor's general liability covers their liability for injuries and damage they cause. It generally doesn't insure your building or your materials. Ask for their certificates anyway.
How long is a builder's risk policy?
Many are written for the length of the project, often three to twelve months, and can sometimes be extended if the work runs long.
Do I need builder's risk for a cosmetic flip?
It depends on the scope of the work and whether the home is vacant. A light cosmetic project may fit a vacant policy. Tell us the plan and we'll match the policy to it.
Who needs builder's risk insurance?
Anyone building or renovating a property that a regular policy won't fully cover, such as a flipper or BRRRR investor doing a major rehab on a vacant home. Lenders on rehab loans often ask for it too.
Does a homeowners policy cover a renovation?
Often not fully. A homeowners policy is written for a home someone lives in, and many limit coverage for major renovations or for a home that sits empty during the work. Tell your agent about the project before it starts.
Does builder's risk cover stolen materials?
Many builder's risk policies cover theft of materials stored on site, and some cover materials in transit or stored elsewhere. Some require the site to be secured, so check the conditions and any theft deductible.
Should the owner or the contractor carry builder's risk?
The contract should say who carries it. On many investor rehabs the owner buys the policy, while the contractor carries general liability and workers comp for the crew.
What happens to builder's risk when the rehab ends?
It usually ends when the work is finished, the home is occupied, or the term runs out, depending on what the policy says. Line up a landlord or homeowners policy to start before that day, so there's no gap.
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