Building a home is exciting, but it also comes with risk.
Before the walls go up, you’ve already invested time, money, and vision into your future home. So why wouldn’t you want to protect your investment?
With builder’s risk insurance, you can protect your construction site, your building materials, and the financial interest you have in the project itself.
If this is your first time hearing the term, you’re not alone.
Many property owners don’t learn about builder’s risk coverage until they’re already deep into planning.
But this short-term construction insurance plays a big role in keeping your construction project on track.
So, what is builder’s risk insurance?
This guide explains it all, including:
The definition of builder’s risk insurance
What a builder’s risk policy covers (and what it doesn’t)
Who needs builder’s risk insurance
How much builder’s risk insurance costs
What to look for when you purchase coverage
Let’s break it all down.
The Definition Of Builder's Risk Insurance
Builder’s risk insurance is a special type of construction insurance designed to protect a home while it’s being built.
A Builder's Risk Insurance policy covers your construction site, not your finished home.
Think of it as temporary property coverage that helps shield your investment from the most common risks during a build.
A standard builder’s risk policy typically lasts for the duration of the build (usually 3, 6, or 12 months). It can sometimes be extended if the project runs long.
Policies are generally written on a standard property insurance form or an inland marine form, depending on the insurance provider.
Here’s what makes it different from other insurance policies:
It only applies while the home is under construction or undergoing major renovation.
It covers building materials, equipment, and structures tied to the project (either on the site or in transit).
What Does Builder’s Risk Insurance Cover?
A builder’s risk insurance policy delivers broad protection for physical materials used in your construction project, along with the money you’ve already put into it.
Below is a breakdown of what a builder’s risk insurance policy usually covers.
Property and Materials
The structure itself: Builder’s risk insurance can cover new construction homes or major renovations.
Building materials: It covers anything stored on the construction site, in transit, or at a temporary location (like a warehouse or staging area).
Temporary structures: These include scaffolding, fencing, forms, and temporary storage buildings.
Fixtures and foundations: These often qualify as part of the covered property.
Landscaping elements: This includes sod, trees, and shrubs (but coverage depends on the policy).
Covered Perils & Risks
A good builder’s risk policy helps protect against:
Fire
Theft (excluding employee theft)
Vandalism
Wind, lightning, or hail (depending on location and insurance provider)
Some policies also let you add coverage for soft costs like extended loan interest, additional permit fees, or architectural expenses.
These tend to come up when a covered delay pushes your project off schedule.
What’s Not Covered By A Builder’s Risk Insurance Policy?
Builder’s risk insurance coverage helps protect your home while it’s under construction. But like any insurance, it has limits.
Most builder’s risk insurance policies include a list of common exclusions that may surprise you.
These are the things your policy won’t cover unless you specifically add them as endorsements.
Here’s what’s typically not covered:
Employee theft: Your policy may cover stolen construction materials, but not if a worker on your job site takes them.
War, terrorism, and civil unrest: These are high-risk events. They are almost always excluded.
Earthquakes and floods: These can be added, but they’re not part of most standard risk insurance coverage.
Contract penalties or delays: If your project runs late or you face penalties, those are financial risks, not physical ones.
Corrosion, mechanical breakdowns, or rust: Long-term deterioration is outside the scope of a temporary construction insurance policy.
Faulty design, materials, or workmanship: If something goes wrong because of poor construction, the builder’s insurance likely won’t help.
Remember, builder’s risk policies don’t cover damage that results from mistakes made during the design or construction process, even if the materials themselves are covered.
So if a wall collapses because it wasn’t built properly, that repair isn’t included.
Builder’s risk insurance also doesn’t cover injuries or third-party property damage. This is covered by general liability insurance.
Builder’s risk insurance policies focus on protecting the property and construction materials. But they don’t cover legal issues, labor disputes, or faulty craftsmanship.
Make sure your insurance agent walks you through any gaps so you’re not caught off guard.
Who Needs Builder’s Risk Insurance Coverage?
Even if you're not the one swinging the hammer, there's a good chance you need builder’s risk insurance if you're building a home from the ground up,
This type of construction insurance protects anyone with a financial stake in the project.
And whether you're a first-time home buyer, working with a general contractor, or financing your build through a bank, there's real money on the line long before move-in day.
Here are the most common policyholders:
Property owners and future homeowners: If you’re investing your own money or taking out personal loans to fund the build, protecting that investment with a builder’s risk policy is just smart.
General contractors and trade contractors: Contractors often purchase builder’s insurance to protect their work, meet contract requirements, or satisfy lender demands.
Developers and construction businesses: When multiple parties are involved risk insurance may be required to protect everyone’s interest.
Lenders and investment companies: Most financial institutions require proof of builder’s risk insurance coverage before they’ll release funds for a building project.
Anyone who stands to lose money if the construction project goes sideways should obtain coverage.
If you're unsure whether you qualify, talk to your builder, lender, or insurance broker. They can help determine whether you need to purchase builder’s risk insurance for your project.
When Does Builder’s Risk Insurance Coverage Start And End?
Most builder’s risk policies start when construction begins.
But coverage doesn’t last forever, and it doesn’t cover the planning phase either.
Once ground is broken or materials arrive at the job site, your coverage kicks in.
But when does it end?
That depends on your specific insurance policy, but here are the most common triggers.
Project completion: Once the home is fully built and passes final inspection, your risk insurance policy may automatically expire.
Occupancy: If someone moves into the home, whether it's you or a tenant, the coverage typically ends.
Owner acceptance: When you sign off and officially take ownership of the completed build, coverage may stop.
Abandonment: If you abandon the project midway through, your coverage expires.
Every builder’s risk insurance provider defines “completion” a little differently.
Some base it on physical completion, others on permit approval, and some on a set percentage of work finished.
That’s why it’s critical to review your coverage options and know your policy’s terms upfront.
Once the policy ends, you’ll usually need to transition to homeowners insurance or a different type of property coverage, depending on how the home will be used.
Speak with your insurance provider to confirm exactly when coverage starts and ends. Especially if your project involves temporary structures or stored building materials.
Builder’s Risk Insurance Cost: What Affects Pricing?
Wondering what builder’s risk insurance costs? Like most things in the construction industry, the answer is: it depends.
In general, you can expect to pay about 1–5% of your total construction budget.
That means if your new home costs $500,000 to build, your builder’s risk insurance policy might run anywhere from $5,000 to $25,000.
Your final price is based on the key factors below.
Type of project: New construction typically costs more to insure than a renovation or remodel, since the financial stake and risk exposure are higher.
Total project cost: More expensive builds come with higher coverage limits, which increases the premium.
Location and risk level: Building in a high-crime area or a region prone to wildfires, hurricanes, or flooding? That’ll impact your rate.
Construction type and building materials: Fire-resistant or non-combustible materials may reduce risk—and your premium. Using high-end finishes or custom design elements could raise it.
Policy duration: Longer builds mean more time on the job site, which can lead to a higher premium.
Endorsements and coverage options: If you add protections for earthquakes, floods, or soft costs, those will increase the total cost. So will coverage extensions like debris removal or temporary structures.
To get the best value, talk to an insurance agent or brokerage service that understands risk insurance coverage for residential property.
They can help you compare insurance policies and find the right balance between protection and price.
Types Of Builder’s Risk Policies
Not every builder’s risk insurance policy looks the same. The right one for you depends on what you're building, how you're building it, and how the insurance provider structures their coverage options.
Here are the main types to know:
Residential Coverage: Covers single-family homes, custom builds, or major renovations on private property.
Commercial Coverage: Applies to office buildings, retail spaces, apartment complexes, and multifamily housing.
New construction coverage: Covers everything from the ground up. Foundation, frame, and all building materials on-site or in transit.
Renovation/remodel coverage: More limited in scope. Policies may only protect specific improvements, not the existing structure.
If you’re planning major structural and functional changes to an older home, you may still need risk insurance coverage. But the terms will be different from a ground-up build.
How To Choose the Right Builder’s Risk Policy For Your Project
When shopping for builder’s risk insurance, price matters. But so does getting the proper coverage for your home build, from start to finish.
Here’s how to find a builder’s risk policy that fits your project:
Get Multiple Quotes
Start by contacting a few reputable insurance brokers or insurance companies that specialize in construction insurance. Rates and coverage options can vary a lot, so it pays to compare.
Review the Fine Print
Once you have quotes in hand, look closely at these details:
Coverage limits: Make sure they match the full project cost, including building materials, soft costs, and any temporary structures.
Deductibles: A lower premium often means a higher deductible. Know what you’ll pay out-of-pocket if there’s a claim.
Exclusions and endorsements: Review what’s not covered. If you need protections for flood, earthquake, or debris removal, those must be added as endorsements.
Choose A Strong Provider
Look into the financial strength and claims history of each insurance provider. The last thing you want is a shaky company backing your property coverage during construction.
Ask for recommendations from your general contractor, lender, or others in the construction industry who regularly deal with builder’s insurance.
Work With A Pro
An insurance agent or brokerage service that understands construction risk can walk you through your options and point out red flags.
For most home builds, you’ll use what’s called a completed value form. This insures the full project cost from the start. Your agent can confirm this.
Other options, like reporting forms, are typically used for commercial or multi-project policies.
Speak with your agent to tailor your policy to match your budget, your job site, and your timeline.
Protect Your Investment Before The First Nail Is Hammered
Builder’s risk insurance may not be the first thing that comes to mind when you’re planning your dream home.
But it’s one of the most important.
Whether you’re managing part of the build yourself or working with a general contractor, builder’s risk insurance is often required before construction begins.
And even if it’s not required, it’s often worth it to protect your financial interest in the project.
At Dunn & Stone, we walk every client through the steps of building a new home. That includes what to expect when it comes to construction timelines, budgeting, and coverage requirements.
We’ll help you understand what you’ll need from start to finish and connect you with trusted pros who can guide you on coverage options.
Frequently Asked Questions
What Is Builder’s Risk Insurance, And How Is It Different From Homeowner’s Insurance?
Builder’s risk insurance protects a home while it’s under construction. It covers the structure, job site, and building materials. Homeowners insurance, by contrast, covers a completed, occupied home.
Do I Need Builder’s Risk Insurance For A Custom Home?
Yes. If you have a financial stake in the build, builder’s risk insurance helps protect it. Lenders often require it, and even cash buyers benefit from coverage.
Can I Purchase Builder’s Risk Insurance As A Homeowner?
Yes. Homeowners can buy builder’s risk insurance directly or be added to a contractor’s policy. Just make sure your name is listed on the policy documents.
How Much Does Builder’s Risk Insurance Cost For A Residential Build?
Builder’s risk insurance typically costs 1–4% of your total construction budget. Pricing depends on location, coverage limits, and project type.
What Does Builder’s Risk Insurance Not Cover?
It doesn’t cover employee theft, faulty workmanship, war, or tools. Builder’s risk insurance also excludes bodily injury or liability claims.
When Does Builder’s Risk Coverage Begin And End?
Coverage begins when construction starts and ends when the home is complete, occupied, or accepted by the owner, whichever comes first.
Company
Liberty Home Guard
American Home Shield
First American Home Warranty
Cinch Home Services
Old Republic Home Protection
HomeServe
Choice Home Warranty
Home Warranty Of America
Texas Coverage?
✅ Yes
✅ Yes
✅ Yes
✅ Yes
✅ Yes
✅ Yes
✅ Yes
✅ Yes
Covers Major Home Systems & Appliances?
✅ Yes
✅ Yes
✅ Yes
✅ Yes
✅ Yes
✅ Yes (via separate plans)
✅ Yes
✅ Yes
Monthly Premium
Starts at $49
Starts at $39
Starts at $42
Starts at $35
Starts at $45
Starts at $7
Starts at $35
Start at $46
Service Fee
Typically $75–$125
$100–$125 (customer selects at sign-up)
$75–$125
$100–$150 (customer selects at sign-up)
Typically $100
$0–$100 depending on plan
$85 (fixed)
$50-$100
Typical Response Time
24–48 hours
Varies (reports range from 24 hours to multiple weeks)
180-day workmanship guarantee, longest on this list
Covers rust, corrosion, and unknown pre-existing conditions
Great for normal wear and tear on HVAC, electrical, and plumbing
Straightforward plans
Lower-than-average service request fees
Several plans come with no service fees
Highly flexible, system-specific plans tailored to your needs
Affordable entry pricing starts at $7/month for individual plans
Fixed $85 service fee helps homeowners budget confidently
Broad home warranty cover for HVAC, appliances, and more
Includes optional coverage for issues like roof leaks
Generous HVAC coverage, ideal for Texas heat
Transparent pricing, rare in the industry
Wide range of add-on options for upscale homes
Cons
Lower coverage limits on some repairs raise out-of-pocket repair costs
Some service fee options are unclear until you begin the sign-up process
Occasional complaints about delays in technician assignment
Higher premiums compared to more affordable plans
Few add-on coverage options
Some complaints of poor customer service and long claim resolution times
Less budget-friendly for cost-conscious homeowners
Limited add-on coverage selection
Does not cover pre-existing conditions, limiting protection for older homes
HVAC coverage not included in the “Repair Only” plan
No roof leak coverage
Higher service request fees than competitors
Limited add-on options
Comprehensive coverage requires stacking plans
Bundled options are confusing, not necessarily comprehensive
Frequent reports of claim denials
Mixed customer service reviews
Fewer added perks than competitors
Some customers report slow claim processing
Add-ons can raise the overall cost quickly if you're not careful
Our Top Pick: Liberty Home Guard
If you're looking for the best home warranty company in Texas, Liberty Home Guard stands out as the top choice in 2025.
It’s not the cheapest option on the list, but it consistently ranks as one of the top home warranty providers thanks to its strong home warranty coverage, fast service, and unmatched flexibility.
Liberty’s plans are designed for real life in Texas, where dual air conditioning systems, major home systems, and high summer temps are the norm.
It’s one of the few home warranty companies that includes coverage for two electric AC units in its standard plan.
What also sets Liberty apart is its level of customization.
With over 30 add-on coverage options, homeowners can build a plan that fits their property perfectly, whether they need coverage for a septic system, a swimming pool, or extra laundry appliances.
This kind of flexibility is rare among other home warranty companies.
It’s not just the coverage options that impress, though.
Liberty earns high marks from home warranty customers for its responsiveness and customer service.
You can manage your home warranty contract through their mobile app, which many Texas homeowners love for the convenience when filing a claim or tracking repairs.
Dual AC coverage in the base plan, ideal for Texas heat
High customer satisfaction
Over 30 add-ons for extra coverage
Mobile app and live chat support
Cons
Lower coverage limits on some repairs raise out-of-pocket repair costs
Some service fee options are unclear until you begin the sign-up process
Occasional complaints about delays in technician assignment
Runner Up: American Home Shield
Coming in close behind Liberty, American Home Shield ranks as one of the best home warranty providers in Texas for 2025.
With over 50 years of experience and broad home warranty coverage that includes preexisting conditions, this provider has built a strong reputation among homeowners with older homes, aging heating systems, and major appliances.
In a 2025 This Old House survey, 44% of Texas homeowners selected American Home Shield as their current provider, making it one of the most widely used Texas home warranty companies.
Our favorite features is the $5,000 HVAC coverage cap per system, which is ideal for the Texas climate. The reason we love it is because A/C repairs are some of the most common (and expensive) home service calls made in the Houston area.
Quick Facts: American Home Shield
Feature
Details
Texas Coverage
✅ Yes
Covers Major Home Systems & Appliances
✅ Yes
Monthly Premium
Starts at $39
Service Fee
$100–$125 (customer selects at sign-up)
Typical Response Time
Varies (reports range from 24 hours to multiple weeks)
Mobile app allows you to request service anytime, anywhere
Cons
Higher premiums compared to more affordable plans
Few add-on coverage options
Some complaints of poor customer service and long claim resolution times
Other Great Home Warranty Companies In Texas
While Liberty Home Guard and American Home Shield earned our top spots, they’re not the only Texas home warranty companies worth your attention.
Several other home warranty providers offer solid coverage, competitive pricing, and reliable service.
If you're looking for alternatives that still deliver great value and protection for your covered home systems, the options below are absolutely still worth considering.
First American Home Warranty
While it’s a bit pricier than some affordable plans (with monthly premiums starting at $42), First American Home Warranty makes up for it with higher coverage limits and solid protection for both major appliances and covered systems.
This is especially appealing to owners of high-end homes in Houston.
Some plans offer up to $7,000 in appliance coverage and unlimited HVAC system coverage, which is what makes this company a strong contender for anyone who wants broad, comprehensive coverage (as long as you’re willing to pay a little more for it).
One standout feature is the First American Advantage upgrade, which adds protection for poor installation issues not always covered under standard home warranty plans.
Great for normal wear and tear on HVAC, electrical, and plumbing
Straightforward plans
Lower-than-average service request fees
Cons
Limited add-on options
HomeServe
HomeServe offers a different take on home warranty coverage in Texas, and it works well for homeowners who want low service fees and highly targeted protection.
Instead of bundling everything into one plan, HomeServe allows you to pick and choose the covered systems you care about most, like plumbing, electrical, or HVAC.
To sweeten the deal, several of their plans have no service fees at all.
That’s a massive advantage if you’re looking to reduce out-of-pocket costs on normal wear repairs.
But because each system is covered under a separate plan, achieving full comprehensive coverage can get pricey.
You may need to purchase multiple plans to match the kind of protection you’d get from bundled providers like Liberty or options found on American Home Shield’s website.
Highly flexible, system-specific plans tailored to your needs
Affordable entry pricing starts at $7/month for individual plans
Cons
Comprehensive coverage requires stacking plans
Bundled options are confusing, not necessarily comprehensive
Choice Home Warranty
With one of the most affordable home warranty plans in Texas, Choice Home Warranty offers monthly premiums starting at $35 and a predictable, fixed $85 service fee.
It’s a budget-friendly option for homeowners who want wide home warranty coverage without a complicated pricing model.
Choice’s plans cover both HVAC systems and major appliances, and they include extras that other low-cost providers skip like limited roof leak coverage.
It’s a strong fit for value-seekers who still want protection for high-cost repairs.
However, Choice’s reputation comes with a caveat.
Despite its large customer base (49,000+ reviews on Trustpilot), it has received criticism for poor customer service and claim denials more frequently than top competitors.
Fixed $85 service fee helps homeowners budget confidently
Broad home warranty cover for HVAC, appliances, and more
Includes optional coverage for issues like roof leaks
Cons
Frequent reports of claim denials
Mixed customer service reviews
Fewer added perks than competitors
Home Warranty of America
Home Warranty of America (HWA) offers plans designed for both homeowners and real estate professionals, which makes it a versatile choice for a wide range of Texans.
Known for its transparent pricing and solid HVAC coverage, HWA is a wise pick for those living in hotter climates like Houston where AC systems get put to the test.
Plans start at $46/month, and coverage includes major appliances and systems, with HVAC protection capped at $5,000.
While the base pricing is competitive, be aware that add-on options can increase costs quickly, especially if you’re customizing coverage for a high-end or custom-built home.
Add-ons can raise the overall cost quickly if you're not careful
How We Picked The Top Home Warranty Companies Of 2025
Companies with the best home warranties in Texas respond quickly, partner with licensed local contractors, and actually follow through on their repair guarantees.
Here’s the criteria we used to build our list of the top home warranty companies in 2025. The companies on the list needed to meet at least 4 of 5 of these requirements in order to make the list.
Must cover critical systems and appliances
Texas homeowners face unique challenges due to the climate. Houston’s heat and humidity put a serious strain on air conditioning systems, plumbing, and electrical systems, which means warranties that skip these aren’t worth your time.
In fact, in a recent 2025 survey by Texas Homeowner Trends, 63% of respondents ranked air conditioning coverage as their top priority when choosing a home warranty in Texas.
Builders also care. They want home warranty companies that cover the systems and appliances they install to avoid post-sale arguments over repairs.
Must be priced for Texas homeowners
We only selected companies whose plans fall within the average home warranty cost range for Texas in 2025. That’s between $52 and $80 per month.
This range reflects pricing for the Houston area, which is one of the state’s most active homebuilding markets.
Plans that are too cheap often have low coverage limits. Plans that are too expensive may not offer enough value for what they charge.
Must have strong online reviews
We only considered companies with an average customer satisfaction rating of at least 4 out of 5 stars across sites like Trustpilot.
High scores show how the company handles real-world problems and home warranty service issues effectively.
Must offer fast, reliable service within a maximum of 48 hours
Texas homes can’t afford to wait for repair when the AC unit breaks down in the middle of summer.
Every company on our list offers quick service calls, a strong contractor network, and local availability for licensed repairs.
The Bottom Line
There’s no one-size-fits-all when it comes to home warranty coverage in Texas, and that’s exactly why we created this guide.
From dual AC unit coverage to low service fees and comprehensive plans with high coverage limits, each of the companies we reviewed brings something different to the table.
Here’s the short version:
Liberty Home Guard is our top pick for its flexibility, customer satisfaction, and coverage designed for Texas heat.
American Home Shield stands out for high HVAC caps and coverage for older homes with no maintenance records required.
And for those on a tighter budget or looking for niche protections, companies like Cinch, HomeServe, and First American still offer reliable service — even if they don’t hit every mark.
So which warranty fits your situation best?
Best For First-Time Homeowners: American Home Shield
AHS offers peace of mind with broad coverage, no maintenance history requirements, and helpful tech features like 24/7 service requests and live video chat support.
Best For Budget-Conscious Homeowners: Cinch Home Services
Starting at just $35/month, Cinch offers solid protection with extras like rust coverage and a $500 homeowners insurance deductible reimbursement.
It’s a budget-friendly pick that still comes with a 180-day workmanship guarantee, which is one of the best in the business.
Best For Homeowners Who Want Total Coverage: Liberty Home Guard
With over 30 optional add-ons, dual AC unit coverage in the base plan, and a strong contractor network, Liberty is built for homeowners who want it all.
It’s the best choice for anyone building a custom home or looking to cover systems that most providers skip.
If you’re building a new home in the Houston area, choosing the right home warranty company is only part of the equation. You also need a builder who cares about long-term quality, not just closing day.
At Dunn & Stone Builders, we partner with trusted home warranty providers and build every home with longevity in mind.
Contact us today to talk about how we can help you bring your dream home vision to life.
Frequently Asked Questions
What Is The Best Home Warranty Company In Texas?
The best home warranty company in Texas is Liberty Home Guard. It offers fast service, strong customer satisfaction, and plans tailored to Texas homes, including dual AC coverage.
Which Home Warranty Providers Have The Highest Customer Satisfaction?
Liberty Home Guard and American Home Shield lead in customer satisfaction, with 4.5-star or higher ratings on review sites like Trustpilot and the Better Business Bureau.
What Does Home Warranty Coverage Typically Include?
Home warranty coverage usually includes major systems like HVAC, plumbing, and electrical, plus key appliances such as refrigerators, ovens, and washers.
Are All Home Warranty Plans Available In Texas?
No, not all home warranty plans are available in Texas. Only licensed Texas home warranty companies can offer coverage in the state.
Which Home Warranty Companies Offer The Best Repair Guarantee?
Cinch Home Services offers the best repair guarantee, with a 180-day workmanship guarantee that’s six times longer than the industry standard.
How Do I Choose Between Different Home Warranty Providers?
Look for providers with fast service times, high customer satisfaction, competitive pricing, and strong coverage for systems common in Texas homes.
What Should I Look For In Home Warranty Plans For Texas?
Look for home warranty plans that include HVAC, plumbing, and electrical systems, offer reasonable monthly rates, and have a solid contractor network for quick repairs.