Flipping Insurance

[Paul Bealefield]

Hey Peeps!

I just picked up a 4/3 with 2800 sq ft on a construction loan and she needs a full remodel. I am working on the permits and insurance before I close on July 3rd. What kind of insurance do you recommend? My agent is recommending a "Builders Risk Policy" This just doesn't sound right to me. Any help would be greatly appreciated!

Peace
Paul

[Tim Norris]

Hey Paul,

There are carriers and Programs that offer coverage while a property is in the rehab phase, without a "full blown" Builders Risk policy. Some points to consider:

1. Ensure the earned premium is minimal. In other words, if you only need coverage for 30 days, don't buy a 90 or 180 policy with a fully earned premium clause.

2. Avoid coverage that has a co-insurance requirement. If you under-insure, a claim settlement could be subject to significant penalty/diminishment.

Hope this helps.

Tim