Homeowners Insurance for a rehab that will be vacant.

Is it going to be hard for me to obtain HO insurance on a property I am buying that is a rehab and will be vacant during renovations? I heard it may be. If it is possible which I am sure it is, am I looking at paying a much larger amount as opposed to an occupied property. Any info on this subject would be greatly appreciated.

Also, do I have to buy a full year insurance if I only plan on holding the property for a few months. Can you pay month to month or get a refund for the unused months if I buy the full year policy.

Thank You for any answers.

Edited: 06/26/2010 at 02:50AM

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Jun 13 '05, 03:50 AM

I'm getting weekly calls from my mortgage rep. because I'm below 50% occupancy in my fourplex (I'm also rehabbing). I keep putting him off, but they keep telling me I'm going to lose my insurance as well.

If you negotiate, you can set up a payment plan, and as for getting a refund if you sell, that is exactly what will happen. Take care.

Edited: 06/26/2010 at 02:50AM

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Jun 13 '05, 08:51 PM

I got insurance from a local Farmers insurance Agent. My loan was a Non Ownwer occupied loan of 90%, my insurance had to have six months worth of vacany included in it which was because my lender thinks im keeping the property. My agent told be the insurance must be prepaid for a year, then once it sold i could contact them and get 60% of the remaining premium returned to me after closing. My insurance cost me almost double what it would cost if i had lived there or had an owner occupied loan.

Edited: 06/26/2010 at 02:50AM

Katy Yanda

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Jun 15 '05, 07:45 AM

Howdy

Yup I had that same question a while back - where do you get insurance on non-occupied rehabs?

Well, it's hard. It IS doable but be prepared to pay a high cost.

My husband and I own 3 houses in MO (we live in CA though) that are not occupied. The insurance on 2 of them was $1100 for 6 months on 1, 3 months on the other. Yeah, not a happy thought.

I'm certainly going to be involved in the insurance issue on the next set of houses (my sister-in-law and husband are overseeing this rehab business while I work a day job and harp on business and tax issues).

BTW if anyone in MO wants to chat about investing there I'd be interested. Although my time here is spotty due to wildy varying work hours.

Bird

Edited: 06/26/2010 at 02:50AM

Donald Stevens

· California

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Sep 13 '10, 05:42 AM

Hello everybody, I'm new to the forum. I specialize in vacant homes with or without rehab. We also write the property once it is occupied and try to find the policy that is right for you. We can write stripped down low cost insurance policies for the professional investor or a comprehensive policy for those that need more protection and are willing to pay more.

If anyone would like help insuring their properties, I would love to help. You can visit our website or read our blog for helpful information or requesting a quote.

I try not to pitch my product on other forums I participate in, but it seemed appropriate. Thanks for your time.

Donald Stevens

· California

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Sep 13 '10, 05:43 AM

Originally posted by Donald Stevens

Hello everybody, I'm new to the forum. I specialize in vacant homes with or without rehab. We also write the property once it is occupied and try to find the policy that is right for you. We can write stripped down low cost insurance policies for the professional investor or a comprehensive policy for those that need more protection and are willing to pay more.

If anyone would like help insuring their properties, I would love to help. You can visit our website or read our blog for helpful information or requesting a quote.

I try not to pitch my product on other forums I participate in, but it seemed appropriate. Thanks for your time.

Steve Babiak

Real Estate Investor · Audubon, Pennsylvania

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Sep 13 '10, 06:22 AM

Some good links can be found here:
http://www.biggerpockets.com/forums/95/topics/396-insurance-

Shane M

Real Estate Investor · Kansas City, Missouri

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Sep 14 '10, 07:26 PM

I just went through this a few months back. It really wasn't a big deal. I went through AmFam, although the policy was actually backed by another insurance company (don't remember off hand who it was). In any case, I was able to get a 3 month policy for around $65 a month. With an occupant, the price is around $50 a month.

Jeffrey K.

Real Estate Investor · Milwaukee, Wisconsin

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Sep 14 '10, 11:16 PM

Make sure you change your policy to "builder's risk" while you are working on it.

Donald Stevens

· California

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Sep 17 '10, 09:15 PM

You need to find an agent that specializes in vacant homes and/or landlord insurance. Most captive carriers like State Farm and Allstate don't have a market because it is not a risk the underwriters want to take on. We get a lot of referrals from other agents because it is such a niche policy.

Account Closed

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Jan 07 '11, 12:36 AM

Yeah Donald's advice seems pretty good. You might also want to check out http://www.homeownersinsurance.org to get some more information before you make a decision though. Hope that helps!