Insurance during the rehab phase

4 Replies

I'd like to ask a question on what type of insurance is best for a house during the rehab phase, before I would rent it out to tenants?  This is the phase after closing but before the tenants actually move in.  Anything can happen, so obviously I would pay for the insurance, but I'm interested in what kind I should get, because first I won't know exactly how long it would take me to rehab the place, so I don't want to go in a situation where I sign up for some insurance which forces me to pay for the full year and I'm done with the rehab in 6 months.  The other point is I'm guessing my insurance would have to change from the rehab phase to the rent-out phase, since it's a different type of risk and the insurance company would obviously have to know exactly which phase the house is in.  Any comments would be greatly appreciated, thanks.

You're going to get property insurance on the house. The difference is you will pay a higher rate, during rehab, for a non-occupied property. I would also talk to your agent about a liability rider to Co er any accidents that may occur with the workers, just in case a GC or contractor isn't carrying the required insurance. As for terms, the insurance policy should be month to month. Don't let an agent bully you into something else. Shop around if necessary. 

Thanks Hattie, never realize an insurance policy could be month to month, for my own house where I live I always had it year to year, so that's definitely good to have that option.

that's funny...I've always paid month to month. My grandparents paid month to month as well. I remember the insurance man coming by every month to collect and make sure everything was good!

just to give you a quick idea of occupied vs non-occupied rates I was quoted ~$700/year for my SFR if occupied and it was ~$1700/year non-occupied.

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