Builder’s Risk Insurance in Texas

Frequently Asked Questions About Builder’s Risk in Texas

How does builder's risk insurance work in Texas?

A builder’s risk policy, sometimes called course of construction insurance, is written for the length of a project rather than for a full year of occupancy. Depending on the carrier and form, it may protect the building under construction, materials that will become part of it, and certain fixtures or equipment waiting to be installed. Some forms also address materials in transit or stored off site. The policy focuses on physical loss to the project itself. It is different from general liability, which addresses certain claims made by other people, and from workers’ compensation or contractor’s equipment coverage. Coverage varies by carrier and policy, so the exact causes of loss, limits, deductibles and exclusions come from the issued policy and its endorsements.

Who buys builder's risk coverage in Texas?

Common buyers include homeowners building a custom home or major addition, general contractors and home builders responsible for project property, real estate investors renovating or rebuilding rental or resale properties, developers of multifamily, retail or office projects, and owners whose lender or construction contract requires project coverage. The construction contract usually says who buys the policy and which parties need to be listed. Texas contracts differ, so the written agreement controls.

Is builder's risk insurance required in Texas?

There is no single Texas rule that requires builder’s risk on every project. A lender, owner or construction contract often requires it, so check your loan documents and contract before work begins.

Does builder's risk cover windstorm and hail in Texas?

It depends on the carrier and policy. Some forms include wind and hail with a separate deductible, and some exclude or limit wind in coastal areas. We review those terms with you before coverage is bound.

What is the Texas designated catastrophe area?

The Texas Department of Insurance (TDI) has designated 14 coastal counties as catastrophe areas: Aransas, Brazoria, Calhoun, Cameron, Chambers, Galveston, Jefferson, Kenedy, Kleberg, Matagorda, Nueces, Refugio, San Patricio and Willacy. The designation also covers certain cities in Harris County east of State Highway 146: La Porte, Morgan’s Point, Pasadena, Seabrook and Shoreacres. In these areas, private wind and hail coverage can be hard to find, and the Texas Windstorm Insurance Association (TWIA) serves as the insurer of last resort for wind and hail.

Do I need a windstorm inspection for a coastal Texas project?

To be eligible for TWIA coverage, new construction and many alterations, additions and re-roofs in the catastrophe area must be built to the building specifications adopted by TDI and certified. TDI says state law requires you to apply for a certificate before construction begins. A certificate of compliance for ongoing construction (Form WPI-8) is based on inspections by an appointed engineer or TDI inspector while the work is underway. Missing that step can make it harder to secure wind coverage once the building is complete, so we raise it early with coastal clients.

How does hurricane season affect a Texas construction project?

The Atlantic hurricane season runs from June 1 through November 30. Projects on or near the Texas coast that will be framed, dried in or partly open during those months deserve a close look at wind terms, named-storm deductibles and the carrier’s rules on binding coverage when a storm is approaching. Carriers may restrict binding new coverage while a storm is approaching, so it helps to arrange coverage before work starts.

Is hail a concern for projects in North and Central Texas?

Yes. The National Weather Service office in Fort Worth notes that large hail, damaging winds, flooding and tornadoes occur nearly every year in the Dallas/Fort Worth Metroplex. For a project with roofing, windows or exterior materials on site, hail terms and deductibles are worth reviewing line by line.

Does builder's risk include flood coverage in Texas?

Often it does not, or only by endorsement with a separate limit. Hurricane Harvey in 2017 brought catastrophic flooding to the Houston region, according to the National Hurricane Center’s report on the storm. The National Flood Insurance Program (NFIP) can insure some buildings under construction, with conditions. FEMA’s flood insurance manual says that before a building is walled and roofed, coverage can be lost if construction stops for more than 90 days, and materials are generally covered only when stored in an enclosed building on or next to the premises. We can help you check the FEMA flood map for your lot and compare NFIP or private flood options alongside the builder’s risk policy.

Can a renovation in Texas be covered?

Often, yes, depending on the carrier. Tell us whether the building will be occupied during the work and whether the existing structure needs coverage.

How do I get a builder's risk quote in Texas?

Call (855) 449-8552 or use the quote form on this page. Have the project address and county, the project type and construction type, the estimated completed value (and the existing structure value for renovations), planned start and completion dates, whether a WPI-1 windstorm application has been filed for coastal projects, site security and prior losses, and the owner, contractor, lender and other parties to be listed. Share any plans, contract or lender insurance requirements so an agent can match the policy to them.