Insurance for flips

8 Replies

Hi all,

I am relatively new to flips and wondering how others insure their flip properties during rehab process.

Currently I am using "high risk" policies from Loyds of Londons.

For the property apprised at $150 K they quote me about $1100 for a year.

So for 6 month which I hold the property I pay $550 is it normal ?

Other people I know use some cheaper options from Erie, which end up around $500 a year.

However my agent says that Erie does cover empty properties so if something happens they will not pay.

Please let me know if somebody knows cheaper way to insure flip properties.

Thanks, Alexi 

The claims frequency for homes under construction is very high. I recommend combining a vacant property policy and a builders risk policy to avoid gaps in coverage but that will increase your costs.

@Alexi Polenur Unfortunately to cost to insure a vacant property is astronomical. Ive shopped around quite a bit and Ive been unsuccessful in getting a good quote. It does make sense if yo consider it from their end.  This is going to be a short term policy that will be cancelled pretty quickly, so in order for them to recoup basic fixed expenses, the policy needs to have more built in fees. Add to that the higher liability if something brakes and no one knows for two weeks like a water leak etc.

I use Vacant Home Insurance from Foremost (you can search the company name on BiggerPockets) for my flips. I get it through my local Farmers Insurance agent and my agent knows that extensive renovations will be taking place. 

To be clear.... when I say "extensive renovations" I mean within the existing footprint of the house with no new foundations, additions, pop tops, etc. added.

Disclaimer: This is not legal advice

I have used Foremost, myself in the past, but I was explained by my agent that it is good for "vacant houses", but not covers "major renovation". I guess it is a gray area ... The real question is if they pay in case something happens or they will try to prove that it happens because constuction took place ...

Thanks everyone for great answers. It really helps. 

Try APIA Protection. They are an investor friendly insurance company. They make it was to add and and remove new properties.

You should work to use an independent commercial agent.  There are quite a few companies that have an appetite for flips depending on what your specific properties and goals are.  

Atain has been my go to with my flipper clients in the past, and it is always highly competitive with price, as well as acting as a master policy with sub policies for the properties, and a pro-rated premium for the amount of time that you own each individual properties.  But, there are quite a few companies that provide this sort of policy.   

best of luck 

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