Builder's Risk Insurance Florida

Last updated: October 27, 2026

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"The first rule in investment is don't lose and the second rule in investment is don't forget the first rule." - Warren Buffett

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Builder's risk insurance protects a property, and the materials going into it, while the property is being renovated or built. For a Florida investor working on a single-family house, a duplex or a fourplex, that is the riskiest stretch of the deal. The house is usually empty. Walls, roofs and plumbing are open. Cabinets, appliances and copper sit on site. And in Florida the house may sit open through hurricane season, when one storm can turn a routine rehab into a total loss.

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This guide covers builder's risk for Florida investors working on 1 to 4 unit properties: house flips, BRRRR rehabs, value-add work on 2 to 4 unit, and ground-up or infill builds. It shows which policy fits which project, what is covered and what is not, how hurricane deductibles and the FEMA 50 percent rule change the math, what your lender requires, and how to keep a claim from being cut or denied.

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Insurance disclosure: OfferMarket operates a rate-shopping platform for real estate investors. OfferMarket Insurance LLC (NPN 20545557) holds insurance licenses in a number of states, listed at offermarket.us/licenses, but it is not yet licensed in Florida. Coverage on Florida properties is quoted, bound and serviced through carriers and agents that are licensed in Florida, and our team rate-shops and quality-checks the quotes for you.

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Key Takeaways

• Builder's risk is temporary property coverage for the rehab or build. It does not include liability, so most investors are better served by a fix and flip policy that bundles property, vacancy and liability coverage.
• Bind before the storm. Citizens and many Florida carriers suspend new coverage once a tropical storm or hurricane watch or warning is issued for any part of the state.
• Expect a separate hurricane deductible, set as a percentage of the dwelling limit, so a wind claim costs far more out of pocket than a fire or theft claim.
• Do not accept a wind exclusion on a financed deal. Florida insurers must offer one, and lenders do not allow it.
• Flood is excluded, and in a flood zone the FEMA 50 percent rule can turn a large rehab into an elevation project. Buy flood at loan closing to skip the 30-day waiting period.
• Price ordinance or law coverage on older homes. Florida's roof rules and frequent Building Code updates make code upgrade costs a real exposure.
• Sinkhole coverage is optional in Florida, and builder's risk programs commonly exclude earth movement.
• Insure to the right value. Underinsuring reduces every claim payment, not only total losses, and a limit raised without your approval costs you premium for nothing.

Which Policy Fits Your Project

The most common insurance mistake we see on a Florida rehab is buying the wrong kind of policy for the work. Three questions decide the answer: how big is the scope, does anyone live in the building, and are you renovating or building new?

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Light cosmetic rehab on a vacant house. Paint, flooring, fixtures and similar work can fit a vacant dwelling policy that allows renovation, or a fix and flip policy with a vacancy endorsement. Watch two things. Vacant dwelling programs often cap the size of the renovation they will accept as a percentage of the property's value, and some leave wind out as standard. A missing wind peril conflicts with lender requirements.

Substantial or structural rehab. Roof replacement, new systems, moved walls and additions call for coverage built for construction risk. Carriers rate structural work higher than cosmetic work because the existing house is more exposed while walls, roofs and floors are open. Describe the scope accurately on the application, because a cosmetic policy on a structural job is a claim dispute waiting to happen.

Storm-damaged property bought as is. Many Florida listings after Hurricanes Ian, Helene and Milton are damaged properties. These need a policy that will accept existing, unrepaired damage, with the understanding that damage present before the policy started is not covered. Document the condition at purchase with dated photos, and check the local substantial damage determination before you close.

Gut rehab. A full gut is still a renovation, not new construction, because a structure existed when the project began. That matters because the existing house needs to be insured, not only the new work.

Rehab with tenants in some units. On a duplex, triplex or fourplex/Quadplex, renovation coverage often allows some occupancy but ends once leasing passes a set share of the units, commonly half. A fix and flip policy may not cover active tenants at all, in which case you need a landlord policy or a hybrid policy that accommodates occupancy.

Ground-up or infill build. New one to four family homes fit builder's risk new construction coverage, written on completed value from the day materials arrive, and built to the current Florida Building Code. Add general liability separately.

The finished rental. Once the property is rehabbed and rented, you no longer need builder's risk. A landlord policy on a dwelling fire special form (DP-3) is the standard fit. Lenders that accept dwelling fire forms typically require the special form.

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Hurricane and Windstorm Coverage in Florida

This is the coverage that defines a Florida rehab, and the one most often limited by an exclusion or a separate deductible.

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How Florida Hurricane Deductibles Work

The Florida Department of Financial Services explains the state's hurricane deductible rules for residential policies:

• Insurers must offer hurricane deductibles of $500, 2 percent, 5 percent or 10 percent of the dwelling limit. For dwellings insured at $250,000 or more, the $500 option does not have to be offered.
• The hurricane period begins when the National Hurricane Center issues a hurricane watch or warning for any part of Florida and ends 72 hours after the last watch or warning is lifted.
• On personal residential policies, the hurricane deductible applies once per calendar year across policies with the same insurer or insurer group. A second hurricane in the same year uses the greater of the remaining hurricane deductible or the all other perils deductible.
• When a hurricane deductible applies, no other deductible can be stacked on top of it.

Three Points Matter Most For Investors:

Read Your Actual Quote. The same Department of Financial Services page notes that surplus lines policies may carry different deductibles. Many renovation and vacant property policies are written in the surplus lines market, so the statutory options above may not be what you see. Some policies use a named storm deductible, a wind and hail deductible or a flat dollar figure. Find the wind-related deductible on the declarations page and write it into your budget.

Size Your Reserves to the Wind Deductible. A percentage deductible is calculated on the insured value, not the loss. If your completed value is $400,000 and your hurricane deductible is 2 percent, you pay the first $8,000 of a hurricane loss. At 5 percent, you pay $20,000. That is simple arithmetic on the deductible percentages, and it is why a Florida rehab budget needs a reserve line for wind, separate from the general contingency.

Check Your Lender's Deductible Terms. OfferMarket's fix and flip guidelines set a $5,000 or 5% property deductible (OfferMarket). Ask your lender how it treats a separate hurricane deductible before you bind, so the certificate is not rejected the day before closing.

Your Lender Will Not Accept a Wind Exclusion

Florida insurers must offer a windstorm exclusion, which requires a signed statement and, where there is a mortgage, written approval from the mortgagee (Florida DFS). Excluding wind makes a quote look cheaper and leaves the most likely major Florida loss uninsured.

Our lending guidelines do not allow windstorm, hail or named storm exclusions. Some vacant property policies leave wind out as a standard feature rather than through a signed exclusion, so read the covered perils as well as the declarations.

Bind Before the Storm, Not During It

When a storm threatens Florida, insurers stop writing new business. Citizens Property Insurance announces statewide binding suspensions: once the National Weather Service issues a tropical storm or hurricane watch or warning for any part of Florida, agents cannot bind new applications or increases in existing coverage until the suspension is lifted. Private carriers commonly follow similar practices. That rule shapes the calendar of a Florida deal:

• Bind before closing, and well before any storm forms. A watch for the Panhandle can freeze binding for a closing in Miami.
• Request limit increases as soon as your scope grows, not after a cone appears on the forecast.
• For a closing between August and October, have the policy quoted and ready days in advance.

Secure the Site When a Watch Is Issued

A house under renovation is a job site, and some Florida counties set storm rules for job sites. Miami-Dade County's hurricane protocol, under Section 8-16 of the county code, applies once a tropical storm warning or hurricane watch is issued, and it requires securing roofing tile, insulation board and other stored materials, fastening down or removing the portable toilet and equipment, and protecting window openings.

The City of Miami Beach publishes similar guidance. Loose materials become windborne debris that can damage your house and the houses next door, which brings your general liability into the loss, so put storm preparation in your contractor agreement.

Flood and the FEMA 50 Percent Rule

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Flood Needs a Separate Policy

Builder's risk and fix and flip policies exclude flood, and storm surge is treated as flood, so a property in a FEMA special flood hazard area needs a separate flood policy, and lenders require one.

Our guidelines set the flood limit at the greater of $250,000 or the loan balance. NFIP flood policies normally have a 30-day waiting period, but FEMA waives it when the policy is purchased in connection with making, increasing, extending or renewing a loan. Buy the flood policy at loan closing. Properties outside the mapped zone still flood in Florida, so a cash buyer should still price flood, especially for a rehab that will hold through hurricane season.

The 50 Percent Rule Can Change Your Scope

In flood zones, communities that participate in the NFIP enforce a substantial improvement and substantial damage rule, usually called the 50 percent rule. The City of Miami Beach adds up the job values of building permits on a property over a rolling 1 year period and divides by the value of the structure.

At 50 percent or more, the whole structure must be brought into compliance with floodplain requirements for new construction, which can mean elevating the house, using flood-resistant materials and adding flood vents. Charlotte County and Hillsborough County run their own versions. Check the local rule before you finalize the budget, because:

• Scope and completed value move together. If the rule pushes your project into elevation, your completed value, timeline and premium all change. Insure the real scope.

• A storm during the rehab can trigger the rule. If covered damage plus the planned work passes the threshold, the rebuild may need to meet new construction standards. Ask your agent how much of that cost each of your policies would pay.

• New construction starts compliant. A ground-up build in a flood zone is designed to current elevation standards from the start.

Plan Flood for the Rental Before the Rehab Ends

If you plan to hold the property, a rental in a special flood hazard area still needs flood insurance under DSCR loan guidelines, and the flood premium changes your cash flow and your debt service coverage ratio.

Quote the builder's risk, flood and landlord policies together at the start, so the numbers in your refinance are real rather than estimates. Our comparison of landlord and flood insurance explains how the two policies work together.

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⚡ Get builder's risk, fix and flip and landlord quotes

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Sinkholes and Ground Collapse

Florida's limestone geology makes ground collapse a real concern in parts of the state. Hernando, Hillsborough and Pasco counties are known as "sinkhole alley," and together they accounted for about two thirds of the sinkhole damage claims reported to the Office of Insurance Regulation from 2006 to 2010.

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Florida law separates two kinds of coverage under section 627.706 of the Florida Statutes (Florida Statutes 627.706):

Catastrophic ground cover collapse must be covered by standard Florida property insurers, but only when all four conditions are met: the ground suddenly collapses, the hole is visible to the naked eye, the house suffers structural damage including to the foundation, and a government agency condemns the house and orders it vacated. Cracked walls and settling alone do not qualify.

Sinkhole loss is broader coverage for structural damage caused by sinkhole activity. It is optional, offered for an additional premium, and the insurer may require an inspection first. Sinkhole deductibles can be 1, 2, 5 or 10 percent of the dwelling limit.

For investors, three practical steps follow:

• Ask early. If the property is in Pasco, Hernando or Hillsborough County, or anywhere with known sinkhole activity, ask whether the rehab policy covers sinkhole loss and at what deductible. Fix and flip and builder's risk policies commonly exclude earth movement.

• Check the history. Ask the seller for any prior sinkhole claim, repair report or stabilization work, and review the inspection report for cracking patterns that suggest settlement.

• Plan the exit. Ask whether the landlord policy you expect to use after the rehab offers sinkhole coverage on that property. A house with a prior sinkhole claim may be harder to insure as a rental.

Florida Building Code, Roofs and Ordinance or Law Coverage

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Code Updates Raise the Cost of a Florida Rehab

The Florida Building Code applies to houses, duplexes and small multifamily properties, and a permitted rehab must meet the edition in force when the permit is issued. The current 8th Edition took effect on December 31, 2023.

For 1 to 4 unit investors, the changes that reach the budget are mostly roof and flood related: a new shingle roof needs two layers of underlayment, and new or substantially improved homes in flood zones must sit higher above the base flood elevation (Permit Place). Every roofing product used in Florida also needs state product approval. Code-driven costs raise both your completed value and your cost to rebuild after a loss, so ask your contractor which edition applies before you set the policy limit.

Miami-Dade and Broward: the High-Velocity Hurricane Zone

In the High-Velocity Hurricane Zone, which covers Miami-Dade and Broward counties, the windows, doors, garage doors and roofing you install on a house must carry a Miami-Dade Notice of Acceptance, which means the product passed the county's impact and wind pressure tests (Permit Place). These products typically cost more than standard ones.

For insurance, that has two effects. Your completed value is higher than a comparable rehab elsewhere in the state, and so is the cost to rebuild after a loss. Set the limit on those real costs. A limit copied from a similar house flip in Ocala will leave a Fort Lauderdale rehab underinsured.

The 25 Percent Roof Rule

Florida's roof rules are one of the biggest drivers of rebuild cost after a partial loss.

Under a 2022 change to Florida law, section 553.844(5) of the Florida Statutes, if a home's roof was installed or replaced under the 2007 Florida Building Code or later, only the repaired section must meet current code, even when 25 percent or more of the roof is repaired (Dinsmore).

Older roofs do not get that relief. For homes built before March 2009 with no prior roof replacement, damage to more than 25 percent of the roof surface can require replacing the full roof to current code (Permit Place).

Think about what that means on a 1970s ranch in Pinellas County with the original roof deck and a 2005 shingle layer. A storm tears off a third of the shingles. The covered damage is one third of the roof, but code may require all of it to be replaced.

Why Ordinance or Law Coverage Matters in Florida

Ordinance or law coverage pays for costs that come from enforcing building codes after a covered loss. It usually has three parts: the value of the undamaged portion that must be torn down, the cost to demolish it, and the added cost to rebuild to current code. The national guide explains each part in detail (OfferMarket).

In Florida, three rules push investors toward this coverage: the 25 percent roof rule on older roofs, the FEMA 50 percent rule in flood zones and the frequent Building Code updates. Our insurance team typically requests ordinance or law coverage at 25 percent of the building limit on fix and flip quotes, and older Florida housing stock is where it pays off most. On a pre-2007 roof or a home in a flood zone, ask whether a higher percentage is available.

Surplus Lines, Taxes and Carrier Strength in Florida

Many Florida fix and flip and vacant home policies come from surplus lines carriers. These are insurers that are not licensed in Florida the same way as standard home insurers, but they are allowed to cover homes that standard carriers turn down, which is often the case for a vacant house under renovation near the coast. Two Florida-specific points belong on every quote review.

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The tax. Florida charges a surplus lines premium tax of 4.94 percent of gross premium, plus the Florida Surplus Lines Service Office (FSLSO) fee and other applicable state surcharges, which the surplus lines agent collects from the insured along with the premium and remits to the state (Florida Statutes 626.932). Policy and inspection fees may also apply. Compare quotes on total cost, not base premium.

No guaranty fund. If a standard Florida-licensed insurer goes out of business, the Florida Insurance Guaranty Association steps in to pay covered claims within limits. Surplus lines policyholders do not have that protection (Florida DFS). That makes carrier financial strength more important, and it is one reason lenders require an AM Best rating of A- VIII or better. Our guide to AM Best ratings explains what the rating means.

How Much Builder's Risk Insurance Costs in Florida

The honest answer is that location and construction drive almost everything. Here is what Florida investors were recently quoted on real 1 to 4 unit deals that came through OfferMarket, anonymized and rounded:

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On similar dwelling values, a coastal or high-wind Florida property can cost two to four times what an inland one does, and the hurricane deductible climbs with it.

For context, builder's risk nationally runs about 1 to 4 percent of completed value, and a standalone Florida policy starts around a $400 minimum. Because Florida pricing swings so widely by county and construction, the only reliable number is a quote on your property. For bundled rehab coverage, see our Florida fix and flip insurance guide.

Refunds When the Project Ends Early

OfferMarket fix and flip premiums are generally refunded pro rata when you cancel early, most often after a sale or after refinancing into a DSCR loan and switching to landlord insurance. Not every builder's risk policy works that way. Some new construction policies are fully earned, which means no refund for unused time. Ask before you bind.

What Factors Influence Builder's Risk Insurance Cost?

Builder's risk is priced on the risk the carrier takes on during the project, and that risk shifts with the property, the work and the policy itself. Carriers such as US Assure group the drivers into five core factors. Our team weighs three more that matter on investor deals.

1. Location

Where the property sits is the single biggest driver of cost, and in Florida it dominates. Carriers look at:

• Distance to the coast, and exposure to hurricanes and windstorms
• Flood zone and storm surge exposure
• Sinkhole activity in the county
• Distance to a fire station and the local fire protection class
• Crime and vandalism rates on the block

You cannot move the house, but you can make sure the quote is built on the right address, protection class and flood zone determination. An error in any of these inflates the premium.

2. Project Type

Carriers rate new construction, installation and remodeling differently, based on how much the existing structure adds to the risk.

• New construction and simple installations usually cost the least, because the timeline is short and there is no existing building to protect.
• Remodeling is rated highest, because an existing structure is exposed to loss the entire time the work is underway.
• A cosmetic remodel rates lower than a structural remodel that moves load-bearing walls, changes the foundation or adds a story.

Describe the scope accurately to the agent. Understating it to shave premium is the fastest way to have a large claim disputed.

3. Construction Type

The materials the house is built from decide how well it survives a fire or storm.

• Masonry and fire-resistive construction rate most favorably, which is one reason concrete block is common in Florida.
• Wood frame rates least favorably, and wood frame near the water is the hardest Florida rehab to insure.

4. Optional Coverages

The base policy covers the core perils. Every endorsement adds premium, so match them to the project. On a Florida rehab the options worth discussing are:

• Flood, which is excluded as standard
• Sinkhole, where the risk exists
• Soft costs: extra loan interest, taxes and fees during a covered delay
• Loss of rents, for units with tenants
• Materials in transit and in temporary off-site storage
• Increased cost from change orders, when the scope is likely to grow
• Sewer, drain or sump backup

5. Additional Fees and Taxes

Two policies with similar base premiums can cost very different amounts once fees and taxes are added, and that comes down to the type of carrier.

• Admitted carriers are licensed in Florida, are backed by the Florida Insurance Guaranty Association if the insurer fails, and generally cannot add separate policy fees to the premium.

• Non-admitted (surplus lines) carriers write many vacant and renovation policies that admitted carriers decline. They add the 4.94% surplus lines tax and can add policy fees, and they are not backed by the guaranty fund.

Compare quotes on total cost, not the base premium, and require an AM Best rating of A- VIII or better.

Three More Factors We Weigh for Investors

• Vacancy and timeline. A house that has sat empty for years, or a project expected to run past 12 months, carries more risk and often more premium. A realistic timeline prevents costly mid-project extensions and a coverage gap.

• The limit. Set it on completed value, without land and without padding. This is where we most often find overpayment, and occasionally a dangerous shortfall that triggers a coinsurance penalty at claim time.

• The deductible. A higher deductible lowers premium, but lenders cap it. Our guidelines cap the property deductible at the lesser of 5 percent or $5,000, so we push back on an uncapped percentage deductible that would run above that, such as a straight 5 percent on a high limit.

How to Lower Your Builder's Risk Cost Without Creating a Gap

You can bring the premium down without leaving a hole in the coverage:

• Insure to an accurate completed value, without padding
• Choose the highest deductible your lender accepts and your reserves can absorb, within the 5 percent or $5,000 cap
• Choose concrete block construction on a new build where you have the choice
• Secure the site with locks, lighting and cameras
• Keep the schedule realistic, so you avoid extension charges and stay ahead of hurricane season
• Compare quotes line by line, not only on price

Never save money by dropping vacancy, wind, liability or theft protection. Those gaps turn ordinary losses into uninsured ones.

What Our Quality Control Catches on Outside Quotes

Every quote that comes through OfferMarket is checked by our QC team against the investor's request and the lender's guidelines before it is bound. These are the problems we flag most often, and the reason we tell investors never to judge a quote by the premium alone.

The wrong policy type for the project. A landlord policy quoted on a vacant gut rehab, or a vacant renovation program quoted on a property the investor plans to rent right away.

A dwelling limit the investor did not ask for. Agents sometimes raise or lower the limit without approval. Raising it adds premium for coverage you could never collect. Lowering it can trigger a coinsurance penalty on every claim.

Functional replacement cost in place of replacement cost. The two look similar on a summary page, but functional replacement cost can pay noticeably less on an older house.

An uncapped percentage wind or hail deductible. A straight 5 percent wind deductible on a $300,000 limit puts the first $15,000 of a storm claim on you. Our guideline caps the deductible at the lesser of 5 percent or $5,000, so we ask for a flat $5,000 or a percentage capped so it cannot exceed $5,000.

Land value deducted from the coverage. Some renovation forms limit what they will pay to the investor's actual capital in the project, minus land value. We ask for it to be removed or explained in writing.

Thin ordinance or law coverage. Many quotes default to 10 percent. On fix and flip policies, we request 25 percent, which matters more in Florida because of the roof and code rules.

Missing water backup. Sewer and drain backup is a common claim and is often left off unless requested.

Liability below lender limits. Fix and flip policies need $1,000,000 per occurrence and $2,000,000 aggregate. Landlord policies on our DSCR loans need $500,000 per occurrence.

Mortgagee and additional insured confused. The lender needs to be the mortgagee on the property coverage and an additional insured on the liability coverage.

No vacancy endorsement. The most expensive omission of all.

Cases From Our Quality Control Desk

These are real situations our team handled, anonymized and summarized.

A renovation form on a rental request. An investor in a hurricane-exposed market asked for landlord coverage on a property ready to rent. The quote came back on a vacant and renovation program built for fix and flip projects, with fix and flip liability limits, a flat loss of rent figure that did not match a 12-month standard, three deductible options instead of one flat deductible and no confirmation of water backup. The wind deductible needed a close look too. We asked for a requote on landlord terms and written confirmation of the policy form. The lesson: the policy type has to match what will happen at the property, not what is easiest to quote.

The limit that grew without approval. An investor asked for a dwelling limit that matched the rebuild cost. The quote came back far higher, because the carrier had raised it to satisfy its own replacement cost estimate, which meant more premium than the investor had planned for. We pushed back, asked the agent to justify the figure and requested pricing on the endorsements the quote left out, including water backup and ordinance or law. The lesson: compare the quoted limit to the one you requested before you look at the price.

The deductible that changed the math. On a coastal property, we regularly see quotes with a wind and hail deductible set at a percentage of the total insured value instead of a flat dollar amount. On a hurricane-exposed home, that one line can be worth more than a year of premium savings. We ask for a capped deductible and show the investor both versions side by side. The lesson: compare deductibles in dollars, not percentages.

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⚡ Have our team check your quote

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What Your Lender Requires

The property is your lender's collateral, so the lender's insurance guidelines shape the policy as much as your own preferences do. This table compares typical requirements during the rehab with the requirements after a refinance into a DSCR loan.

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The mortgagee clause. List the lender's exact name and address followed by ISAOA/ATIMA. OfferMarket's clause reads OfferMarket Capital LLC ISAOA/ATIMA, 627 S Hanover St, Baltimore, MD 21230. More detail is in our mortgagee clause glossary entry.

Proof of insurance. OfferMarket requires an ACORD form, plus certificates and paid receipts, at least 24 hours before closing, and final policy documents within 60 days after closing. A binding suspension can block a last-minute policy, so do not leave this to the day before.

Carrier strength. An AM Best rating of A- falls in the Excellent category, and Financial Size Category VIII means policyholder surplus of $100 million to $250 million. This matters more in Florida, where surplus lines policies have no guaranty fund backstop.

Why a Lender and an Insurer Under One Roof Matters

Most closing delays caused by insurance come down to a mismatch between the policy and the loan: a wind exclusion, a deductible the lender will not accept, a liability limit too low, a flood policy bound too late or a mortgagee clause with the wrong name. When you use OfferMarket Capital for the loan and OfferMarket Insurance to rate-shop the coverage, the same team that sets the loan requirements checks the policy against them before closing, not the day before.

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What Builder's Risk Covers on a 1 to 4 Unit Project

Coverage depends on the policy form, so treat this section as a list of things to confirm rather than a promise of what any one policy includes.

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The House and the Work

On a renovation, two values are at risk: the house you bought and the work you are adding. Not every builder's risk policy insures both.

For an investor, the loss that matters most is a fire or storm that takes the whole house, not only the new kitchen. Confirm in writing that the existing structure is insured from the day you close.

Materials on Site, in Storage and in Transit

Building materials are often the easiest thing to lose. OfferMarket's renovation coverage insures the structure, materials and equipment on the premises or within 100 feet, and the foundation.

Florida rehabs often carry high-value impact windows and doors, which are attractive to thieves before installation and sit outside a site-only policy if staged elsewhere. If materials will be stored off site, ask for coverage at that location by name.

The Causes of Loss

Residential builder's risk commonly covers fire and lightning, wind and hail (when included), theft, vandalism, arson and collapse. Florida leads much of the country in lightning during its summer storm season, which raises fire risk on a house full of temporary wiring and stored solvents.

Many policies add extensions such as debris removal, materials in transit, sewer or drain backup and ordinance or law, each with its own smaller limit. Ask for the sublimit on each one, especially debris removal, which is expensive after a hurricane.

Theft: The Claim Investors Misunderstand Most

Theft is one of the most frequent construction claims, and residential job sites have predictable targets: copper wiring and pipe, appliances, air-conditioning units and impact windows.

Some policies exclude theft of building materials that are not yet attached to the structure, which means the new range or the impact windows sitting in the garage may not be covered until installed. Before materials arrive, ask three questions:

• Is theft of uninstalled materials and appliances covered on site, in storage and in transit?
• Is there a sublimit?
• What security conditions apply? Then schedule deliveries as close to installation as your contractor allows.

Ordinance or Law for Older Homes

When a damaged older home is rebuilt, code can require upgrades to undamaged parts of the house. Ordinance or law coverage pays for the value of the undamaged portion code forces you to tear down, the cost to demolish it, and the increased cost to rebuild to code. On fix and flip quotes, our standard is 25% of the building limit. Many policies default to 10 percent, which can fall short on an older Florida home.

What Builder's Risk Does Not Cover

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Flood and storm surge. Both are excluded. Rising water from a hurricane is a flood claim, not a wind claim. In a coastal storm, wind and flood can damage the same house, and each policy pays its own share, which is why a coastal property needs both.

Earth movement and sinkholes. Builder's risk programs commonly exclude earth movement. Florida's sinkhole rules are covered above.

Pre-existing damage. A storm-damaged house bought as is will not be covered for damage that existed before the policy started. Dated photos at closing protect you.

Faulty workmanship and defective materials. Builder's risk is not a warranty. Policies generally exclude the cost to correct faulty work, though a policy with an ensuing loss provision may cover resulting damage to other property.

Wear and tear, rot, pests and mold. Termite damage, old plumbing and gradual deterioration are maintenance problems. Mold coverage is often excluded or capped, which matters in Florida's humid climate when a house sits open.

Employee theft and worker injuries. Theft by the crew and injuries to workers are excluded. Workers belong under the contractor's workers' compensation.

Liability. A standalone builder's risk policy does not cover injuries to other people. The liability section below explains how to fill this gap.

Land and landscaping. Land, trees, shrubs and walkways are generally not covered, and land value should never be part of your limit.

One more gap is a belief rather than an exclusion. Some investors assume a general liability policy will cover damage to the project itself. It will not. Liability insurance covers what you owe other people. Builder's risk covers the project. A rehab needs both.

Vacancy: the Empty-House Problem

Most flips start with a vacant house, and standard policies often exclude or void coverage on unoccupied homes. More investor claims go wrong here than anywhere else.

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How Vacancy Clauses Work on Residential Policies

In the standard homeowners form, coverage for glass breakage and vandalism ends once the dwelling has been vacant for more than 60 consecutive days. Dwelling policies work much the same way, and some older forms use 30 days (PropertyCasualty360).

Why "Under Renovation" May Not Protect You

Many policies say a home under construction is not considered vacant, but renovation can be treated differently. Gutting a home, with the contents removed and the occupants gone, can make it vacant, and visiting to check on progress does not change that. Merlin Law Group states courts look for substantial, continuous construction activity, measured by how many workers were on the project and how much time they spent in the building. Even builder's risk can tighten when work stops, limiting coverage to named perils after a set period with no activity.

How Rehabs Drift Into Vacancy

The trap is rarely a decision to abandon a project. It is ordinary dead time: waiting on permits, a draw, a missing contractor or a buyer. In Florida, a hurricane that halts work for weeks can push a house past a vacancy threshold while no one watches the calendar.

The Fix

Disclose vacancy when you apply, and make sure the policy carries a vacant property endorsement or vacancy permit for the whole rehab period. Our lending guidelines require borrowers to notify the carrier when a property becomes vacant or unoccupied and to obtain a vacancy permit for the entire vacancy period. Back the endorsement with records: a dated work log, contractor invoices, inspection reports and weekly photos.

Liability on a Rehab

A builder's risk policy does not cover workplace injuries or liability. On an investor rehab, the liability exposure often outweighs the property exposure, which is why we pair renovation coverage with general liability on every fix and flip quote.

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• Who can get hurt. Contractors and their crews, inspectors, appraisers, buyers' agents, neighbors and trespassers.

• Children and open job sites. Under the attractive nuisance doctrine, landowners may owe trespassing children a heightened duty when a dangerous condition is likely to attract them (Cornell Legal Information Institute). Open foundations, unsecured stairs and a swimming pool under renovation are exactly that kind of condition. Fence and lock the site.

• What lenders require. Fix and flip lenders commonly require general liability of $1,000,000 per occurrence and $2,000,000 aggregate on an occurrence basis, with the lender as additional insured.

• Your contractors' coverage. Collect certificates of general liability and workers' compensation before work begins, and ask your contractor to add you as an additional insured by endorsement. In Florida, construction industry employers must carry workers' compensation once they have one or more employees (Florida Division of Workers' Compensation). If a contractor carries no coverage, the owner can become the target.

• The owner-builder exemption does not fit a flip. Florida lets owners act as their own contractor under section 489.103(7), but only for homes built or improved for their own use and not offered for sale or lease within one year of completion. A flip generally needs licensed contractors pulling permits.

How to Set the Right Limit

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Insure to Completed Value

Builder's risk limits are based on the estimated completed value of the project. When the limit falls short, many forms reduce claim payments in proportion, using a simple formula: insurance carried divided by insurance required, multiplied by the loss. If a policy requires insurance equal to 80 percent of value and you carry 60 percent, you collect 75 percent of each loss and absorb the rest, even on a small claim.

Our Completed Value Worksheet

Use these lines to build the number before you request a quote:

• Rebuild cost of the existing structure. Not the purchase price and not the land.
• Full rehab budget. Materials and labor, not only materials.
• Contractor overhead and profit. These can represent up to 20 percent of completed value.
• Florida code and HVHZ costs. Product-approved windows and doors, underlayment, and in Miami-Dade and Broward, Notice of Acceptance products.
• Flood compliance. If the 50 percent rule applies, include elevation, flood-resistant materials and flood vents.
• Minus land. Land is never part of the insured value.

ARV Is Not Replacement Cost

Investors think in after-repair value. Insurers think in rebuilding cost. ARV is a market value that includes the land and the neighborhood. Replacement cost is what it would take to rebuild the structure at current construction prices.

A waterfront lot in Naples may represent most of the ARV, but it is not part of what you insure. Use the ARV calculator for market value, and ask for a replacement cost estimate on the structure itself.

When the Loan Sets the Limit

Our fix and flip guidelines set the property limit at replacement cost, taken from the appraisal or a replacement cost estimator, or at the loan amount. If the loan amount is below replacement cost, the policy must be written on an agreed value basis or carry zero coinsurance.

When Coverage Starts and Ends

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Starting Coverage

Bind coverage before you close, because your lender, or your title company on a cash purchase, will require proof of insurance. In Florida, bind before a storm forms, because a binding suspension can block a last-minute policy. On new construction, have builder's risk in place by the time materials are delivered.

Buying Coverage in the Middle of a Rehab

You can often buy coverage after work has started, but you must disclose the work already done, and some insurers require an inspection or limit certain coverages. Expect more questions the further along the project is.

What Ends Coverage

Builder's risk ends automatically, often without a reminder, when a termination trigger occurs:

• Ownership transfers to the buyer.
• A set period passes after construction is complete.
• The property is occupied or put to its intended use.
• A single-family home is leased or rented.
• A set share of the units in a 2 to 4 unit building is leased.
• Permanent property insurance takes effect.
• Your interest in the property ends, or you abandon the project.
• The policy term expires.

The Early Tenant

On a BRRRR project, a tenant moving in can end builder's risk on the spot. On a duplex or fourplex, leasing half the units can do the same. Bind the landlord policy first.

Handing Off to Landlord Insurance

If you keep the property, put the landlord policy in effect before you cancel the old one, send the new policy details to your servicer, and send the servicer's information to the new carrier. If you sell, cancel after the transfer closes and request your pro rata refund.

How to Handle a Claim in Florida

The NAIC's claims guidance lays out the core steps, and Florida adds a few rules of its own.

• Report within 1 year. Notice of an initial or reopened property claim must be given within 1 year after the date of loss, and a supplemental claim within 18 months (Florida Statutes 627.70132). After a hurricane, report promptly even if the full estimate comes later.

• You cannot assign your benefits to a contractor. For property policies issued or renewed on or after January 1, 2023, Florida bars assignment of post-loss benefits, and an attempted assignment is void. If a contractor asks you to sign over your claim, the answer is no.

• The hurricane deductible applies first. On a hurricane loss, expect the hurricane deductible, not the all other perils deductible, to come off the top.

A practical routine: photograph the property before the storm and again as soon as it is safe, make temporary repairs and keep receipts, separate wind damage from flood damage in your notes because two policies may respond, and notify your lender, which will usually be on the claim check.

Hurricane Loss Prevention for a Florida Rehab

A loss you prevent never touches your premium or your schedule.

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• Before the season. Schedule roof work and window installation early, so the house is dried in by peak season if possible. Order impact windows and shutters with lead times in mind .

• At a watch. Follow local site securing rules. Remove or tie down loose materials, empty or remove the dumpster, secure the portable toilet and move stored materials inside a locked, dried-in space.

• At a warning. Shutter or board openings, secure roof tarps, shut off power to the house where appropriate and move uninstalled appliances, fixtures and tools into a locked room or off the property. Take dated photos.

• After the storm. Inspect for hazards before entering. Start drying out water damage quickly to limit mold, report the claim and keep every receipt.

• All year. Florida's afternoon storms bring lightning and heavy rain even outside named storms, so keep roofs tarped, temporary wiring safe and solvents away from ignition sources.

The Rental Exit: a Cheaper Florida Landlord Policy

The rehab is the best chance to lower the cost of insuring the finished rental. Florida's landlord market rewards features you can add while the walls and roof are open.

• Document wind mitigation. Florida uses the Uniform Mitigation Verification Inspection Form, OIR-B1-1802, to document roof covering, roof deck attachment, roof-to-wall connections, roof shape, secondary water resistance and opening protection so a policyholder can earn windstorm premium discounts. Schedule the inspection when that work is complete, and keep product approvals and permits for the inspector.

• Mind the roof age. Florida law bars insurers from refusing to issue or renew a homeowner's policy solely because the roof is less than 15 years old, and for older roofs requires an inspection before demanding replacement. The statute refers to homeowner's policies, so landlord policies may differ, but a new roof during the rehab remains one of the strongest moves for insurability and price.

• Bind the landlord policy before the tenant moves in. Occupancy can end builder's risk, so put the landlord insurance policy in place first, then cancel the rehab policy and request any pro rata refund. Our DWG-3 policy guide explains how landlord property coverage works.

Florida Playbooks by Market and Strategy

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Miami-Dade and Broward Rehabs

Expect HVHZ product requirements for windows, doors and roofing, higher completed values and site securing duties under the county hurricane protocol. Price the hurricane deductible carefully on a higher limit, and confirm the 50 percent rule before scoping work in a flood zone such as much of Miami Beach.

Miami had one of the lowest flip rates among large metros in the first quarter of 2026, at 5.5 percent (ATTOM), so a deal that pencils there depends on tight cost control.

Tampa Bay and Southwest Florida Flood-Zone Flips

Fort Myers, Cape Coral, Naples, St. Petersburg and the Tampa Bay coast took major damage from Hurricane Ian in 2022 and Hurricanes Helene and Milton in 2024. Many properties for sale there are storm-damaged, which makes the substantial damage and improvement rules central to the deal.

Get the local determination before you buy, insure the true scope and bind flood at closing. With all-cash buying so common in Naples and Cape Coral set the coverage a lender would require even without a lender.

Pasco, Hernando and Hillsborough: the Sinkhole Belt

Add sinkhole coverage to the conversation before closing. Review the seller's disclosures for any prior sinkhole claim or stabilization work, and confirm whether the policy covers sinkhole loss during the rehab and at what deductible.

Jacksonville, Orlando and Inland Markets

Inland projects face less storm surge but still carry hurricane wind, heavy rain and flood exposure. Do not skip the flood zone check because a property is far from the beach, and keep the hurricane deductible in the budget. Lower coastal exposure can mean more carrier options and better pricing.

The Panhandle, the Keys and the Treasure Coast

These markets combine coastal wind exposure with flood risk. Wood frame houses near the water are the hardest to insure during a rehab (Rough Notes), so start the quote early and expect fewer carrier options.

Ground-Up and Infill Builds

New construction is where standalone builder's risk fits best. Insure to full completed value under the current Florida Building Code, put coverage in place before materials arrive and add general liability separately. Estimate financing with the construction loan calculator and our ground-up construction loan page.

BRRRR in Florida

Use the rehab to set up the rental: new roof, opening protection and a wind mitigation inspection before you shop the landlord policy. Get the landlord and flood quotes through OfferMarket, then run the refinance math with the DSCR calculator. Our BRRRR method guide covers the full strategy.

What Builder's Risk Insurance Is

Builder's risk insurance, also called course of construction insurance, is property insurance for a building while it is being built or renovated. It covers the structure, the materials already installed and the materials waiting to be installed against losses such as fire, wind, theft and vandalism. It is temporary by design. A policy exists for one project and ends when that project ends.

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Most builder's risk policies are written on an all-risk (open perils) basis, which means they cover any cause of loss the policy does not specifically exclude. Many also cover materials in transit and in off-site storage. There is no single standard builder's risk form, though. Two policies with the same name can respond very differently to the same loss, which is why our team reads the actual wording on every quote rather than the summary page. In Florida, the wording that matters most is the wind coverage and the hurricane deductible.

Florida investors usually buy builder's risk in one of two ways:

• A standalone builder's risk policy insures the house and materials during the work. It does not cover injuries to other people or liability for damage to their property, so it needs a separate general liability policy beside it.

• A fix and flip policy, also called renovation insurance, combines property coverage, builder's risk features, a vacant property endorsement and general liability in one policy, with optional ordinance or law and loss of rents. For most investor rehabs, this is the better fit.

Why a Homeowners Policy Does Not Fit a Rehab

A homeowners policy is built for an owner living in a finished home. It generally does not contemplate a renovation, its debris removal and other additional coverages are sized for an occupied house, and it is the wrong form for an investment property in the first place.

Florida adds another layer: the private homeowners market has been under strain for years, and carriers writing occupied homes are rarely interested in a vacant property with an open roof or no drywall. Add vacancy, open walls and stored materials, and a homeowners policy can fail exactly when you need it.

Why the Rehab Phase Is So Risky in Florida

Hurricane season overlaps most project timelines. The Atlantic hurricane season runs from June 1 to November 30, a window that captures about 97 percent of Atlantic storms, and it peaks around September 10 (FOX Weather, citing NOAA).

The typical flip took 161 days from purchase to resale in the second quarter of 2026 (ATTOM), so a Florida rehab that starts in spring will almost certainly spend the peak of the season under construction.

Flood is a statewide issue. Florida has about 1.7 million National Flood Insurance Program policyholders, and in 2023 the state received about 69 percent of NFIP claim payments nationwide.

Coastal construction risk is hard to place. A Rough Notes review of the Florida builder's risk market found that the closer a project is to the coast, the less likely admitted markets are to cover wind or flood. It identified wood frame construction on or near the water as the hardest risk to place, and warned that policy extensions are harder to obtain in Florida.

Many Florida flippers carry the risk alone. In ATTOM's Q1 2026 report, 79.2 percent of flips in Naples and 77.5 percent in Cape Coral were bought with all cash. No lender forces those investors to insure, so an uninsured hurricane, fire or theft loss falls entirely on them.

Terms You Will See on a Quote

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Completed value. The expected value of the finished project. Builder's risk limits are usually set on this number from day one, even though the house is worth less while the work is underway.

Existing structure coverage. Coverage for the house you bought, as opposed to the new work. Some renovation policies insure only the renovation value unless you add the existing structure.

Named insured and additional insured. The named insured owns the policy, usually the LLC or person on title. An additional insured is added to someone else's policy, such as your lender on your liability policy or you on your contractor's.

Mortgagee clause and ISAOA/ATIMA. The mortgagee clause protects your lender's financial interest. ISAOA means "its successors and/or assigns," and ATIMA means "as their interests may appear." A mortgagee and an additional insured are not the same thing, and lenders usually want to be named both ways: mortgagee on the property coverage and additional insured on the liability coverage.

Hurricane deductible. A separate, usually percentage-based deductible that applies to hurricane losses during a watch or warning period, as explained above.

Replacement cost and actual cash value. Replacement cost pays to repair or rebuild without deducting depreciation. Actual cash value subtracts depreciation, so an older roof or system pays out far less.

Functional replacement cost. A settlement basis that pays to repair with less costly materials that perform the same function. It can pay noticeably less on an older house.

Coinsurance and the 80 percent rule. Many property policies require you to insure a minimum share of value, often 80 percent. Insure for less, and the policy reduces every claim payment in proportion.

Vacancy permit. An endorsement that restores coverage a vacancy clause would otherwise take away.

Ensuing loss. Damage that results from an excluded cause. A policy may exclude faulty workmanship but cover the water damage a bad plumbing joint causes.

Builder's Risk Insurance Guidelines

Below are common builder's risk insurance guidelines for fix and flip loans (otherwise known as hard money loans). These coverage limits are generally considered best practice from a risk management perspective.

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Property Coverage

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General Liability Coverage

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Flood Insurance

If the property is in a FEMA special flood hazard area, your lender may require flood insurance.

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Additional Details

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The OfferMarket Builder's Risk Recipe

Our insurance team uses this seven-step method to structure renovation coverage for 1 to 4 unit Florida investors.

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1. Classify the project accurately. Cosmetic rehab, structural remodel, gut rehab or ground-up build. Disclose work already started, the vacancy history, any tenants in place and the expected timeline.
2. Set the limit on completed value. Start from the rebuilding cost of the finished house and your lender's guideline. Include contractor overhead and profit and Florida code and HVHZ costs, and exclude land.
3. Confirm wind and the hurricane deductible. No wind exclusion on a financed deal, and reserves sized to the deductible.
4. Close the vacancy gap. Confirm a vacant property endorsement or vacancy permit for the full rehab period.
5. Add the Florida coverages. Ordinance or law at 25 percent, flood where needed and sinkhole where the risk exists.
6. Add general liability at lender limits. $1,000,000 per occurrence and $2,000,000 aggregate on an occurrence basis, with the lender as additional insured.
7. Bind early and plan the exit. Bind before closing and before any storm watch, use the exact mortgagee clause with ISAOA/ATIMA, and line up the landlord policy before the tenant moves in.

Florida Builder's Risk Checklist

• ✅ Policy bound and proof of insurance delivered before closing, and before any storm watch
• ✅ Policy type matches the scope: cosmetic, structural, gut rehab or ground-up
• ✅ Wind included, with no windstorm or named storm exclusion
• ✅ Hurricane deductible known, and cash reserves sized to it
• ✅ Limit set on completed value: land excluded, HVHZ and code costs included
• ✅ Existing house insured, not only the renovation
• ✅ Vacant property endorsement or vacancy permit for the full rehab period
• ✅ Flood zone checked; flood policy bound at closing if required; local 50 percent rule reviewed
• ✅ Ordinance or law at 25 percent; sinkhole coverage decided where the risk exists
• ✅ Theft of uninstalled materials covered, with sublimits known
• ✅ General liability at lender limits, lender as additional insured
• ✅ Surplus lines tax and carrier rating reviewed
• ✅ Mortgagee clause exact, with ISAOA/ATIMA; named insured matches title
• ✅ Wind mitigation inspection and landlord policy lined up for the exit

How OfferMarket Insurance Works

OfferMarket is a rate-shopping platform built for 1 to 4 unit residential real estate investors. OfferMarket Insurance LLC (NPN 20545557) holds insurance licenses in a number of states, but it is not yet licensed in Florida. On Florida properties, we rate-shop your coverage across carriers and agents that are licensed in Florida, and your policy is quoted, bound and serviced by those licensed carriers. View our license list at offermarket.us/licenses.

You submit your property once, and our team quality-checks each quote against your request and your lender's guidelines before you bind: the policy type, the limit, the settlement basis, the hurricane deductible, ordinance or law, water backup, liability and the mortgagee clause. We coordinate the quotes, the certificates for closing and your lender, and when the property is ready to rent, we help you move to landlord insurance without a gap.

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Frequently Asked Questions

Do I Need Builder's Risk Insurance for a Flip in Florida?

If the house is vacant and under renovation, a homeowners policy is the wrong fit, and lenders require property and liability coverage before closing. A fix and flip policy that includes builder's risk features, a vacancy provision, wind coverage and general liability is the common solution.

Does Builder's Risk Cover Hurricane Damage in Florida?

It can, if wind is included. Some vacant and renovation policies exclude wind or offer it only as an option, and Florida insurers must offer a windstorm exclusion. Lenders require wind coverage, and a separate hurricane deductible usually applies (Florida DFS).

What Is the Hurricane Deductible on a Florida Policy?

Florida residential policies offer hurricane deductibles of $500, 2 percent, 5 percent or 10 percent of the dwelling limit, and the $500 option is not required at $250,000 or more. Surplus lines policies may differ.

Can I Buy Coverage When a Hurricane Is Approaching?

Often not. Citizens and many private carriers suspend binding new coverage and increases once a tropical storm or hurricane watch or warning is issued for any part of Florida. Bind well before a storm forms.

Does Builder's Risk Cover Flood or Storm Surge in Florida?

No. Flood, including storm surge, requires a separate policy. In a special flood hazard area, lenders require it, and buying it at loan closing avoids the 30-day waiting period.

What Is the FEMA 50 Percent Rule?

In flood zones, if improvements or damage reach 50 percent of the structure's value, the building must be brought up to current floodplain standards, which can include elevation. Communities apply it differently; Miami Beach uses a rolling one-year total of permit values.

Does Builder's Risk Cover Sinkholes in Florida?

Usually not. Florida requires property insurers to cover catastrophic ground cover collapse when strict conditions are met, but broader sinkhole coverage is optional and costs extra.

How Long Do I Have to File a Claim in Florida?

Notice of an initial property claim must be given within 1 year after the date of loss, and a supplemental claim within 18 months.

How Much Does Builder's Risk Cost in Florida?

It depends on the property and its location. On recent Florida deals processed through OfferMarket, a vacant single-family renovation in Jacksonville was quoted near $1,205 a year on $265,000 of dwelling coverage, an inland Gainesville investor property near $3,339 on $390,000, and a higher-wind coastal property near $5,300 on $345,000.

Nationally, builder's risk runs about 1 to 4 percent of completed value. Coastal location, wood frame construction, HVHZ product costs and the surplus lines tax push premiums up.

Is OfferMarket Licensed in Florida?

OfferMarket Insurance LLC (NPN 20545557) holds insurance licenses in a number of states, listed on our licenses page, but it is not yet licensed in Florida. OfferMarket operates a rate-shopping platform: on Florida properties, we compare quotes across carriers and agents licensed in Florida, who quote, bind and service the policy, and our team quality-checks each quote before you bind.

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Protect and Grow Your Portfolio With OfferMarket

Builder's risk insurance is a line of defense for the most exposed months of any deal, and in Florida it has to work alongside the building code and the storm calendar. Between hurricane deductibles, binding suspensions, the 50 percent rule, older roofs and flood exposure far from the beach, experienced Florida investors know that protecting capital during a rehab matters as much as the profit at the end of it.

OfferMarket's insurance platform works for a first flip in Orlando and for a pipeline of rehabs from Miami-Dade to the Tampa Bay coast. We check the coverage, the deductibles and the lender requirements so that you can focus on the project.

Protect your capital. Protect your reputation. Protect your future in Florida real estate.

OfferMarket serves Florida investors at every stage, from a first rehab in Jacksonville to BRRRR rentals in Cape Coral and infill new construction in Broward County.

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