Hello! I am getting ready to close on my first investment property and came across having to purchase 2 types of insurance in order to close on my funding from a fix and flip Line of Credit product. The bank required I have both homeowner's insurance as well as Builders Risk Insurance. I'm sure this varies from state to state so if anyone in NJ can shed some light here I would appreciate it. I just want to make sure that it is absolutely necessary to obtain both kinds of insurances. Thank you!
hi @Angelica Hughes - This seems weird. When I have done reno projects in the past, they only required Builder's Risk for flips or very distressed properties I was going to buy and hold.
I am wondering if they are asking for both because part of the property will be occupied while the renovations are happening? Either way, I would talk with an insurance agent, I am not sure they would even write both policies as you would be double insured. I could be wrong.
Hopefully we can get an insurance agent to chime in.
Thanks @Andrew Kerr ! I was thinking the same about having double insurance. I am going to reach out to the insurance agent this morning and have a little more discussion around this. I will update the post once I know more in case anyone else ever needs to know.
Thanks again for your input, it's greatly appreciated!
Any updates regarding your insurance policy? Curious to find out what you ended up doing.
Builders risk During rehab/vacancy.....homeowner/landlord policy when occupied after.
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