Louisiana requires liability limits of 15/30/25. That covers $15,000 for one person's injuries, $30,000 total for injuries per accident, and $25,000 for property damage. Here's how that compares with a common higher-limit setup:
Louisiana requires liability limits of 15/30/25. That covers $15,000 for one person's injuries, $30,000 total for injuries per accident, and $25,000 for property damage. Here's how that compares with a common higher-limit setup:
Deductibles work in your favor if you plan carefully. Moving collision from $500 to $1,000 typically lowers your premium, as long as you can actually cover $1,000 the day a claim happens. Keep an eye on your comprehensive deductible too, since flood and hail claims fall there. Don't cut liability limits to save money, though. Lowering liability saves little and leaves you exposed in exactly the type of claim Louisiana sees most.
Builders risk insurance in Louisiana covers a home while it's under construction. For spec homes, the builder typically buys it. For custom homes, either the builder or the homeowner may carry it, depending on the contract. Coverage usually ends at completion, sale, or occupancy, and many policies may restrict new coverage when a named storm threatens the Gulf.
That's the short version. The longer version matters because a half-framed house in Covington or Slidell is one of the most exposed structures in St. Tammany Parish. It has no finished roof, open walls, lumber stacked in the yard, and appliances sitting in boxes. A single afternoon thunderstorm can soak subfloor sheathing. A copper thief can strip a job site overnight. A tropical system can turn a six-month build into a twelve-month headache.
Most of the coverage problems we see on new construction don't come from bad policies. They come from mismatched expectations about who bought what, when it stopped, and whether wind was ever included. This guide covers how builders risk works for spec and custom homes in Louisiana, so you can ask the right questions before the slab is poured.
Understanding Builders Risk Insurance in Louisiana
Builders risk is a property policy for a structure that doesn't exist yet. It protects the building as it goes up, along with materials on site and, depending on the form, materials in transit or stored off site. A standard homeowners policy won't step in here, because homeowners carriers write coverage for finished, occupied dwellings.
A typical policy may cover:
- Fire and lightning damage to framing and installed materials
- Theft and vandalism of materials, fixtures, and appliances once installed or secured on site
- Wind and hail, if the policy includes it (more on that below)
- Soft costs, on some forms, such as extra interest or permit fees caused by a covered delay
What it usually leaves out is just as important. Flood is almost always excluded and needs a separate policy. Faulty workmanship, wear and tear, and the contractor's own tools and equipment typically fall outside the coverage too.
Lenders care a great deal about this. Louisiana construction loan programs virtually always require documented builders risk and flood coverage before any funding is released. If your policy isn't bound and your lender doesn't have proof, the first draw may not happen.
Who Buys the Policy for Spec vs Custom Homes?
The answer depends mostly on who owns the land and who carries the risk if the project goes sideways. Spec homes and custom homes split along that line, but the contract is what actually decides it.
When the Builder Carries the Coverage
On a spec home, the builder owns the lot, finances the construction, and plans to sell the finished house. Nobody else has an insurable interest yet, so the builder buys the policy. Many builders working in St. Tammany carry a reporting form or a master policy that covers multiple homes under one program, adding each new start as it breaks ground.
Builders on custom projects may also carry the policy, especially when they're the borrower on the construction loan. The upside for the homeowner is simplicity. The catch is visibility: if you're the client, you should see a certificate of insurance naming you and your lender, and you should know whether wind is included. We've seen custom home clients assume their builder had full coverage, only to learn after a storm that the policy excluded wind entirely.
When the Homeowner Secures the Policy
On many custom builds, the homeowner owns the lot and takes out the construction loan. In that setup, the owner often buys the builders risk policy directly. This gives you control over limits, deductibles, and whether wind and hail are included, which can be worth a lot in a coastal parish.
Expect to provide the construction contract value, the projected start and completion dates, construction type (wood frame vs. masonry), and the property address. If the builder is also carrying a policy, sort out overlap early so you aren't paying twice or, worse, assuming the other party has it covered.
When Does Builders Risk Coverage End?
This is where people get tripped up. Builders risk coverage typically ends at the earliest of several milestones, not the latest. Those usually include:
- Policy expiration, often six or twelve months from the effective date
- Project completion
- Owner acceptance of the finished home
- Sale of the property, which matters most for spec builders
- Occupancy, which deserves its own warning
Most Louisiana builders risk policies include an occupancy clause that ends coverage once the building is put to its "intended use" or occupied. That means moving furniture in early, letting a family stay there "just for a few weekends," or hosting a housewarming before the certificate of occupancy can all end coverage before you realize it.
Construction delays are the other trap. Permitting backlogs, material shortages, or weather can push a build past the policy term. Some carriers may offer extensions, but usually only if you ask before expiration. Once the term lapses, getting coverage back on a partially built home can be difficult.
Our advice: have your homeowners policy ready to start the day builders risk ends. A one-day gap is still a gap.
How Louisiana Storms and Seasons Change Your Coverage
Hurricane season runs June 1 through November 30, and it shapes nearly every builders risk decision on the Northshore. The biggest practical issue is the binding restriction. When a named storm forms and threatens the Gulf, carriers typically suspend new policies and coverage increases for the affected area. If your policy isn't bound before that happens, you may have to wait until the storm passes.
Timing your start date makes a difference. A slab poured in February has a better chance of being dried-in before peak season than one poured in August. Builders who know this often push framing and roofing toward spring.
Storm deductibles are another detail worth reading closely. Wind and hail deductibles on builders risk policies may be a percentage of the insured value rather than a flat dollar amount, which can mean a much larger out-of-pocket cost after a hurricane.
The broader market is shifting too. For the first time in five years,
rate decreases in the Louisiana property market equaled increases as of July 2026. Commissioner Tim Temple described recent reforms as starting to "bend the curve" of the market, and new carriers are entering. That's encouraging, though industry leaders have been clear that
change does not come overnight. Shopping multiple carriers still matters.
Comparison: Standard vs. Wind-Exclusion Policies
On the Northshore, the single most important line in a builders risk quote is whether wind and hail are included. Some carriers offer lower premiums by excluding them, which can look attractive until a storm rolls through.
| Feature | Standard Policy (Wind Included) | Wind-Exclusion Policy |
|---|---|---|
| Fire, theft, vandalism | Typically covered | Typically covered |
| Wind and hail damage | Covered, subject to deductible | Not covered |
| Hurricane roof or framing loss | May be covered | Not covered |
| Flood | Not covered (separate policy) | Not covered (separate policy) |
| Premium | Higher | Lower |
| Lender acceptance | Usually accepted | May not satisfy loan terms |
| Fit for St. Tammany builds | Usually recommended | Higher risk without a separate wind policy |
If you do choose a wind exclusion, you'd typically need a separate wind policy to fill the hole. Many lenders won't accept a builders risk policy without wind coverage in a coastal parish, so check your loan requirements before choosing a quote based on price alone.
Common Questions About Louisiana New Construction Insurance
Does this cover my tools? Usually not. Contractor tools and equipment typically need inland marine or equipment coverage, which the builder carries separately.
What happens if a hurricane is in the Gulf? Carriers typically stop binding new policies or adding coverage in the threatened area until the storm passes. Get your policy in place before you break ground, not the week a system forms.
Does builders risk include flood coverage? Almost never. You'll need a separate flood policy, and your lender will very likely require proof of both before releasing funds.
Can I move in before the house is finished? You can, but it may end your builders risk coverage under the occupancy clause. Have your homeowners policy active before anyone moves in.
What if construction runs longer than my policy term? Call your agent before the policy expires. Some carriers may offer extensions, but they're much harder to get after a lapse.
Can I insure for less than full replacement cost? Louisiana's
Act 480 created a stated value option in 2026 that lets property owners insure for an amount like the mortgage balance instead of full replacement cost. It may help with premiums on your finished home, but understand what you'd be giving up before choosing it.
Making the Right Choice for Your Build
A good builders risk policy starts with three clear answers: who's buying it, when it ends, and whether it includes wind. Spec builders almost always carry their own coverage. Custom home owners need to decide with their builder and lender who holds the policy, then confirm it in writing. And everyone building in St. Tammany Parish should treat hurricane season as a scheduling factor, not an afterthought.
The details buried in the policy form, like occupancy clauses, storm deductibles, and extension terms, are what decide whether a claim gets paid. That's why we spend time explaining contracts and exclusions, not just quoting premiums. As an independent agency, we compare options from multiple carriers so you can see the trade-offs side by side.
Aubert Insurance Agency has been insuring families and builders in Covington and Slidell since 1910. If you're planning a spec or custom home, Start a Quote with us before your first draw, and get your coverage set while the skies are still clear.
About the Author
Kyle Beerbohm
President
We've been independent since 1910, and four generations of local ownership have kept us that way. We're one of the oldest agencies in St. Tammany Parish and the fourth oldest business in the City of Covington. I treat that history as a responsibility rather than a plaque on the wall. My job is to keep us answering to the families and business owners who walk through our doors, and to keep serving this parish for another hundred years.
