Do you buy "Vacant Dwelling Policy" or just cross your fingers?

6 Replies

On the properties I have purchased, renovated and flipped to date, I have NOT bought "Vacant Dwelling" insurance. This was a huge oversight because I have funded everything with cash on hand and could have suffered a total loss of my investment if something catastrophic would have occurred 

I am about to close on another and will be buying this policy from here on out. I don't yet have a quote for this property, I know it's not worth the risk of being uninsured.

Do you flippers and rehabbers buy insurance on the vacant dwellings? If not, how do you manage your risk?

In Oklahoma(maybe everywhere) it is called Builders risk policy. It is probably a good idea. I have done it both ways. Mostly on expensive projects I buy it.

I ALWAYS by a policy. I go to the property before I close (1hr etc or so). After I close I go see my agent and I get it covered before I do anything else. 

I do buy a vacant policy. I have one right now that costs about $150 per month. Another good option is a Builders Risk policy because the vacant dwelling policy doesn't cover theft or small things if I remember correctly. 

I always buy insurance to guard against exactly what you wrote about.  For the house I just closed on yesterday (and plan to rebah/sell), I got a policy for $183 for 3 months.  Cheap considering the potential loss.  I'm in Michigan and don't have to worry about flood/hurricane insurance, so i'm not sure what the premium for yours would be...

I believe in FL there are both "Vacant Property" and "Builder's Risk" policies. I'll have to credit my wife with mentioning this to me. It's just one of those things that I overlooked in the hustle and bustle of everything else.

I"ve now added it to my acquisition checklist and will be buying from here on out. It's interesting that the policies I have researched have NO ability to receive an amortized refund if you happen to cancel early so my decision will be 3 month or 6 month. The policies seem to be easily extended if needed though.

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