BRRRR: When do you buy insurance?

[Ryan D.]

Curious about this one-- do you buy insurance prior to the rehab? Don't want my house to burn down and be out the purchase price.

[John Mocker]

Ryan,
You should have both Liability and Property Insurance in place when you close. The type of Insurance depends on the details of the project and property:
1. If the property will remain vacant for a time before the reno:
Vacant Dwelling policy that includes Property & Liability

2. If you will be renting it out for a time period before starting the reno:
Dwelling/Fire policy that includes Property & Liability

3. If the reno will be starting shortly:
Renovation Builders Risk policy (including Liability or a separate Liability policy). A Vacant Dwelling policy with Renovation could also be a possibility

Once the reno is finished you will want to change to a Dwelling/Fire policy if the property is rented or a Vacant Dwelling policy if it is not rented.