Insuring a home not lived in

5 Replies

Hello, My husband and I buy one or two homes a year, renovate it and sell it. Depending on the size of the home, it can take anywhere from three months to six or seven months to get it ready to sell. We usually sell them within a month or two. (Another month by the time we make it to the closing table). He makes the homes way above average with really nice fixtures, show worthy kitchens and master suites, etc. and he knows so much about all forms of construction that if he hires someone, he knows if they are doing the job right. Our tax person told us we should make our business an LLC. So we did a year ago.

Our insurance agent has been wonderful with finding ways for us to be insured with State Farm. We’ve had SF for all our insurance for 30 years. We have been flipping houses for 25 years (we’ve lived in a bunch of them) and my husband does most of the work himself.  Lately he has hired out more and more things - roofing, electrical, plumbing, tiling. He also had one employee he used for the last several houses. He was a full time employee. (My husband has another full time job in addition to flipping). 

So for years, the agent just added a homeowners insurance policy for the home we were renovating. Then SF started noticing and cancelling one of the policies if we had it more than 60 days or so. So he insured this last one as a rental dwelling policy. We justified it because the full time worker was there every day most of the day, then my husband was there in the evenings most of the time. 

We just bought another house on auction, and we aren’t sure if we will be hiring the full time employee. And I just read some things about insurance companies not covering losses if they determine your house is either vacant or unoccupied. 

So my question is how to insure this? I don’t know of any company that would want to only insure a house being flipped. 

You should be getting builders risk insurance. SF does not carry this. Look to someone like American Modern. It's pretty expensive but worth the peace of mind. It covers the house plus all the materials on site. Traditional home insurance does not cover houses that are vacant or houses that are under construction. If SF came into a house that you were remodeling, assuming this is not your person residence, they can deny all claims.  

@Renee Weaver I buy a policy for my flips through my Farmer's Insurance agent - but it isn't a Farmer's product - "US Assure"... I buy 6 months at a time. You definitely don't want a rental policy and if something were to happen you would not be covered. Can't believe your insurance person even recommended that. So - a policy on each property as a vacant home. AND... you need a million dollar or more umbrella policy and every time buy / sell a house it needs to be added / deleted. Your agent can explain how an umbrella works - but it is a great way to cover your butt and your assets. 

Thank you. I should have some time today and I’ll start looking. I didn’t think I would find any company willing to only do one line, and it be a home that is unoccupied.  We could probably pass the vacant rule (if I what I read online is correct). We bought some of the furniture at this same auction and it has nice appliances that we will keep. But we won’t be staying in it overnight. It will only be occupied during most daytimes as we work on it. Your answer gives me some avenues to pursue. 

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