Building a home from the ground up comes with insurance considerations that are very different from those for an existing or occupied home. In Massachusetts, a property that is under construction is typically not eligible for a standard homeowners policy until construction is complete and the home is ready for occupancy.
If you’re planning a ground-up build, here’s how insurance typically works — and how it differs from vacant homes, renovations, or tear-down rebuilds.
What Is a “Dwelling Under Construction”?
A dwelling under construction generally refers to a residential structure that is being built from the ground up and is not yet habitable. This includes situations where:
- The home does not yet have a certificate of occupancy
- Essential systems (plumbing, electrical, HVAC) are incomplete
- No one is living in the structure
- The home is not suitable for normal day-to-day living
Because the risk profile is very different from a completed home, most standard homeowners insurance policies are not designed to cover properties during this phase.
Common Insurance Options for Ground-Up Construction
Insurance for homes under construction is often handled through a policy designed specifically for construction exposures. Depending on the situation, this may include:
Builder’s Risk Insurance
A Builder’s Risk policy is commonly used to insure a home during ground-up construction. These policies are typically designed to cover the structure, materials, and certain risks while the home is being built.
Builder’s Risk policies may be carried by:
- The property owner
- The general contractor
- Both parties, depending on the contract and carrier requirements
Dwelling Under Construction (Carrier-Specific Options)
In some cases, certain homeowners insurance carriers may offer coverage for a dwelling under construction when the project is being completed by a licensed general contractor and specific underwriting guidelines are met.
Availability, coverage terms, and requirements vary significantly by carrier.
What Dwelling Under Construction Is Not
This is where confusion often arises. A dwelling under construction is not the same thing as the following scenarios:
Vacant Homes
A vacant home is an existing structure that is empty of occupants (and often contents). While vacant homes have their own insurance challenges, they are fundamentally different from ground-up construction.
👉 Learn more in our guide: What to Know About Vacant Homes in Massachusetts
Homes Under Renovation
A home under renovation is typically an existing structure that may still have a roof, walls, and core systems in place. Even major renovations are usually treated differently than new construction for insurance purposes.
Renovation projects may require different endorsements or dwelling policies, but they are not the same as a ground-up build.
👉 Learn more in our guide: Insurance Considerations for a Home Under Renovation in Massachusetts
Tear-Downs and Rebuilds
Homes that are being torn down and rebuilt can fall into a gray area. Insurance treatment often depends on:
- Whether any portion of the original structure remains
- The stage of demolition or construction
- Carrier-specific underwriting rules
These situations should be reviewed carefully before work begins to avoid coverage gaps.
Why Insurance Timing Matters
One of the most common issues property owners face is assuming their existing homeowners policy will automatically extend to a new build. In many cases, it does not.
Insurance should be reviewed before construction starts to help ensure appropriate coverage is in place from the beginning of the project.
Work With a Massachusetts Insurance Advisor
Construction projects involve multiple parties, contracts, and timelines. Insurance requirements can vary by carrier, project type, and who is responsible for coverage.
Risman Insurance Agencies works with Massachusetts homeowners and property owners to help review insurance options for ground-up construction, renovations, and vacant properties.
Important Disclaimer
Insurance coverage, definitions, eligibility, and exclusions vary by policy, carrier, and state.
This article is for educational purposes only and does not alter or extend coverage.
Coverage cannot be added, deleted, or changed until confirmed in writing by the insurance carrier or our office.
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