In binders insurance worth it?

7 Replies

What's "binders insurance"?

A "binder" is the temporary policy you get when you first buy a new policy. Its just temporary until the real policy gets issued and gives you coverage until the process gets completed. Is that what you mean?

Jon - That was my first thought as well...but I wonder if he actually meant "builders" insurance...

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If you are talking about title binding insurance, yes, i find it totally worth it if you are flipping because the title company will normally charge a far lower fee to do the title work/transfer upon the sale of your flip. The last house I did, I saved around $1200 at time of sale by having title binding.

You could be right @J Scott. Builder's Risk, or at least "empty house" is essential for a fix and flip, unless you own it for cash and are willing to self insure.

I've not heard the term "title binding insurance", either. I have done "hold opens" on title insurance so the policy could be re-issued after a fix and flip at a lower cost.

Originally posted by @CK Hwang :
If you are talking about title binding insurance, yes, i find it totally worth it if you are flipping because the title company will normally charge a far lower fee to do the title work/transfer upon the sale of your flip. The last house I did, I saved around $1200 at time of sale by having title binding.

Is there a way to calculate how much there would be in savings or is the title company the only one that can provide numbers?

Assuming that's like a "hold open" the savings is significant. The cost of the new policy will be based only only the increase in value of the property from when the original policy is issued until the new policy is reissued.