Builder’s Risk Insurance: Are Your Insured’s Betterments-Only Project Correctly Valued?

Owners and tenants often make improvements to their homes for various reasons, including remodeling kitchens, upgrading bathrooms, replacing old fixtures, and carpets. While construction is underway to make such improvements, proper coverage must be in place.

Builder’s Risk Insurance Options

Distinguished offers three different types of Builder’s Risk policies: new ground-up construction, remodeler’s, and betterments-only coverages. When renovating or making improvements to an existing property, owners and general contractors can opt to purchase a Builder’s Risk – Betterments Only policy if they want to insure only the betterments while in the course of construction. Our program provides this option.

Betterments-only policies are essential for property owners, especially those residing in condominiums, as a community association’s insurance on the structure of a unit does not cover betterments. Townhouses and single-family homes may also need betterments-only policies as a homeowner’s policy often limits or excludes coverage during renovations and does not cover vacant properties.

Why Is It So Important to Properly Value Betterments?

It’s critical to review with insureds what is and isn’t covered under their existing policies when planning to undergo property renovations and remodeling. In fact, when writing a Builder’s Risk – Betterments Only policy, we first ask the owner or tenant if there is coverage on the existing building and ensure that the client understands that we are providing coverage for the betterments only.

Once we have confirmed it’s a betterments-only project, we want to know the value of the betterments. It’s critical that the broker communicate to the client about providing an accurate valuation. The policyholder must provide an accurate valuation of the betterments to prevent underinsurance, as this could result in the policyholder paying a coinsurance penalty and incurring out-of-pocket expenses for a claim.

Case Scenario

An insured valued the betterments they were making to a home at $30,000 when purchasing Builder’s Risk coverage. A house was broken into and there was damage to the internal improvements. During the claim process, it was uncovered that the budget for the betterments was approximately $95,000 – significantly less than the value they declared when purchasing the policy. After the loss was adjusted, a coinsurance penalty was applied, and the insured was responsible for the uncovered costs of the claim.


In conclusion, proper valuation of betterments and understanding the coverage available under existing policies are essential for property owners planning renovations or remodeling. Betterments-only policies provide protection during construction and ensure that policyholders are adequately covered against potential losses.

Submit Your Business Online

To obtain coverage for betterments during construction, brokers can submit their business through our online submission portal. Brokers must be registered first to submit. It takes only a few minutes to fill out the application, and we will get back to you with a quote ASAP. If your clients like what they see, you can bind the policy right there through the same online portal.

About Distinguished Programs

Distinguished Programs is a leading national insurance Program Manager providing specialized insurance programs to brokers and agents with specific expertise in Fine Art and Collectibles, Environmental and Construction Professional, Executive Lines, Inland Marine, Real Estate & Builder’s Risk, Community Associations, Hotels, and Restaurants. Property and Liability products are distributed through a national network of agents and brokers. Serving the same core markets and partnering with the most stable and reputable carriers, Distinguished’s high-limit Umbrella programs remain the clear choice in its area of specialty for superior coverage, competitive pricing, and attentive service. Through thoughtful innovation, stemming back to 1995, Distinguished Programs fosters growth and opportunities for its brokers, carriers, and employees.

View a full list of our programs and submit business with Distinguished.

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