Insurance coverage on flips

2 Replies

Hello House Flippers!

Just curious as to what type of product should I ask an insurance company for when I call them to cover my flip. At the moment I’m only planning on doing 1 flip at a time (part time flipping), and I have 1 buy and hold rental.

Good question.

Assuming it's vacant while rehabbing, and repairs are relatively minor, you need a Vacant policy, not a Homeowners policy or Landlord policy.  If repairs are more extensive, like adding sqft, you need a builders risk policy.

AND, the named insured needs to be your entity, not you personally.  With your lender if any named as Mortgagee.

If there are any insurance experts reading this please correct me if I'm wrong.

My experience as a lender has been flippers will get a homeowners or landlord policy because it's the cheapest, or have the named insured in their personal name, again because it's cheaper.  Flippers like to do insurance on the cheap because with a near 100% loan what do they have to lose...lender loses.

Believe it or not, I had one flipper whose insurance agent didn't have a clue what a Vacant policy was and kept insisting a homeowners policy was 'the appropriate coverage' to use his words.  I eventually put forced placed insurance on the place (very expensive) and flipper paid.