So we have some rental properties that we have on a commercial insurance policy. We have started doing some flipping and our insurance company isn't exactly excited about us having contractors coming in and our plan.
They said we can get some kind of general contractor insurance (meaning ourselves as GC) or we can make sure the contractors have certain insurances themselves. For those seasoned investors, what are you doing and what suggestions are there for our situation? Right now we are doing 4-6 a year but goal of 10-12 a year.
For any construction project on a home, you need Builders Risk Insurance. Covers risk of loss while the property is vacant.
If you are in the business of flipping houses, or building houses, then general liability and workers comp is also a good idea.
@Kelly Courtney there are very few insurance companies that are comfortable with flipping. The few out there have a policy set up to contemplate the 3 different exposures, vacant, rehabbing and rented. You have 1 policy and add and remove properties through out the year and you pay a monthly amount based on the # of location on the policy at that time.
Most of my clients will have an entity for acquiring/flipping, and if they decide to keep it they move it to a second entity, which would be similar to the commercial policy you have now.
I will PM you the info.
Also make sure any contractors you use are bonded and insured.
What type of insurance would be best if I bought a home in a LLC, will be doing renovations, living there for 2 years, and then most likely rent it out? Any information would be greatly appreciated!
@Angel McClinton there are a few ways this can work depending on how flexible your insurance company is.
If the renovations are minor enough that will allow you to live there during construction, then a Homeowners policy will be the best fit.
If your insurance company will not do a Homeowners policy because the title is in a LLC, then purchase a commercial Landlord/Rental Dwelling policy to cover the property, and purchase a Renters policy for yourself. The Renters policy will give you Personal Legal protection and cover your personal belongings that are not owned by the LLC.
Once you rent the policy out, then the only option will be a Landlord/Rental Dwelling policy.
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