Insuring properties that are being rehabbed or vacant..?

11 Replies

Who do you use to insure your Fix and Flip properties. Do you get one type of policy while the rehab is being done (Builder's Risk?) and then another type after you get the CO and it is vacant and on the MLS? Any advice is greatly appreciated!

Originally posted by @Brenda Hamstead :

Who do you use to insure your Fix and Flip properties. Do you get one type of policy while the rehab is being done (Builder's Risk?) and then another type after you get the CO and it is vacant and on the MLS? Any advice is greatly appreciated!

 Brenda, there are several insurance programs out there for flipping.   The policies have the ability to change occupancy from Vacant to Rehab back to Vacant or Occupied.  Month to month billing on a single policy makes it easy to add properties on and off as you acquire and sell them.

I'll PM you the program my clients use.

@Jason Bott I would be interested in that as well, if you don't mind. I appreciate it in advance.

@Brenda Hamstead

Some insurers offer a 'vacant dwelling policy' however we have had a situation where when an extensive rehab was happening, the insurer didn't want to touch it until basically the systems were done, and the drywall was going up.  If I recall the name of insurer was 'Foremost' for the vacant policy dwelling.  I'm not sure how many vendors sell into that arena.

There was a period of 2-3 weeks where we had a ton invested on our primary residence but no policy that wasn't great from a risk management perspective - 

That's all I know - we didn't push much further to see who could underwrite that stuff.  Hope this helps.

Thanks Jim!  That helps... is a property considered "vacant" when it is being rehabbed?  I had read somewhere that there may be the option for a "builders risk" policy during rehab and then we would switch to a vacant policy while the home is being sold.  Is that correct?

@Jason Bott Hey Jason, would you mind sending me over the info for that as well? This is also something I’m interested in. Thanks!!!

Originally posted by @Brenda Hamstead :

Thanks Jim!  That helps... is a property considered "vacant" when it is being rehabbed?  I had read somewhere that there may be the option for a "builders risk" policy during rehab and then we would switch to a vacant policy while the home is being sold.  Is that correct?

 Brenda, A Vacant policy is meant for a property without an occupant and without any renovations going on. 

With a Builders Risk policy, the property is most likely vacant, but the Property and Liability policy are rated to take into consideration all of the construction.

Example - A Builders Risk will have a much greater chance of a fire, while a vacant building will have a greater chance of vandalism or damage from water leaks.  

Because a Vacant Building and a Builders Risk  

Originally posted by @Brenda Hamstead :

Who do you use to insure your Fix and Flip properties. Do you get one type of policy while the rehab is being done (Builder's Risk?) and then another type after you get the CO and it is vacant and on the MLS? Any advice is greatly appreciated!

Brenda, look into a "Vacancy and General Liability" insurance policy.  You can kill all birds with one stone.

@Brenda Hamstead I use nreig for builders risk during rehab, and then transfer it to vacant property coverage from there. Good coverage, creative customer service, and the best premiums that I could find.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here