Does your policy
cover an open permit?

The short answer

Once a renovation goes beyond cosmetic work — an addition, a structural change, a project that opens up walls or the roof — a standard homeowners or commercial property policy will often exclude damage tied directly to that construction. That gap is exactly what a builder’s risk policy, or a “dwelling under construction” endorsement added to your existing policy, is designed to close.

Why the standard policy falls short

Homeowners policies are underwritten around a finished, occupied home with predictable risk. An open-permit renovation changes that risk profile — exposed framing, temporary weatherproofing, materials staged on site, more foot traffic from trades — and many insurers treat damage connected to that active work as outside the original policy’s coverage, particularly for larger structural or addition projects rather than a cosmetic kitchen refresh.

What builder’s risk actually covers

A builder’s risk policy (or an endorsement that extends your existing policy for the construction period) is built specifically for a property under active renovation. It typically covers the structure itself, materials on site or in transit, and damage from causes like fire, wind, theft, and vandalism during the build — the exact window your standard policy is least likely to fully cover.

The 2026 wrinkle: rebuild cost basis

California’s updated building energy code applies to permits filed on or after January 1, 2026, and the stricter requirements it introduces can raise the actual cost to rebuild or repair a home beyond what an older policy’s coverage limits anticipated. If your policy’s dwelling coverage was set a few years ago, it’s worth confirming with your carrier that the limit still reflects current rebuild costs under the new code — not just the original purchase-era estimate.

What to do before you start

Call your insurance agent before permits are pulled, not after, and ask directly: does my current policy cover an open-permit renovation of this scope, and do I need a builder’s risk policy or endorsement for the construction period? Confirm your contractor carries their own general liability and workers’ comp too — see our guide on vetting a general contractor for how to check that directly through the CSLB.

What this means for your project

We carry our own general liability and workers’ comp coverage as a CSLB-licensed contractor under California license #1094201, and we’ll walk you through exactly what stage of your project introduces a permit and where your own coverage needs to pick up.