Insurance for flips?

[Jason Baehr]

I'm currently closing on my first flip house. Its a 1350 sq ft single family home in the Houston area and needs mostly cosmetic work. My hard money lender requires I have homeowner insurance so I started by getting a quote from my agent for my primary residence policy. He is offering a "Vacant Property Quote" which covers 80% of the ARV (ARV is 130,000) for the dwelling and $300K liability, 3 month term and it is fully earned, for almost $800.

This is my first flip, but this seems pretty expensive to me for a 3 month policy. Can anyone let me know if I'm looking at the correct type of coverage for a flip, and can anyone in the Houston area comment on the cost? Thanks!

[Shawn Thom]

Call an independent agent and compare.  Every state is different for insurance so what works in other states may be a little different.  I am in Texas and get builders risk insurance like Wayne mentioned.  My independent agent gets it through Tapco.  Most agents will not have something available that will cover theft. I always get it added with tapco.  you can also add liability.  I've never had to make a claim.

I'd look into a 6 month policy.  On the ones I get it is 50% earned so if you can only get a 3 month refund.  Typically 1 month rehab, 1 month sales and 1  month close, so you use 3 months (or a little less).  in my experience 6 month policies are prices better than 3.

I just bought a 6 month policy for $109k in Denton county Tx for $800 with $5k theft added.