What insurance to buy for Fix and Flip property?

Insurance
4yFollow

What insurance to buy for Fix and Flip property?

Rahul Gupta
Investor · Member since 2018 · 47 posts · 19 votes

Hello, 

I am starting a project soon in a small town in IL, and looking for some help on where to buy the insurance that will cover the builders risk as well as the property itself in case of fire or flood. 

I looked on steadily. com as well as spoke to a statefarm agent but i am not getting any clear answer on what will be the right type of insurance.

Should I get the dwelling coverage based on the amount of investment I will do or the rebuild cost? I am not sure if it makes sense to get a coverage for 300k as a rebuild cost when my total investment will only be 80k with an ARV of 120k.

Is there an online portal or an agent I can talk to who has the expertise tpo deal with fix and flip insurance in IL?

Thank you for your time. 

0Reply
76 views

Most Popular Reply

Rod HanksBusiness Member
Insurance Agent · Dallas, TX · Member since 2013 · 743 posts · 462 votes
4y
Quote from @Rahul Gupta:

Hello, 

I am starting a project soon in a small town in IL, and looking for some help on where to buy the insurance that will cover the builders risk as well as the property itself in case of fire or flood. 

I looked on steadily. com as well as spoke to a statefarm agent but i am not getting any clear answer on what will be the right type of insurance.

Should I get the dwelling coverage based on the amount of investment I will do or the rebuild cost? I am not sure if it makes sense to get a coverage for 300k as a rebuild cost when my total investment will only be 80k with an ARV of 120k.

Is there an online portal or an agent I can talk to who has the expertise tpo deal with fix and flip insurance in IL?

Thank you for your time. 

You need a builders risk policy for the finished value of the project. Builders risk will cover fire theft vandalism malicious mischief windstorm and hail storm damage but will not cover flood. If the property is in a flood plain you would need a flood policy. I’m licensed in IL and happy help.

Rod Hanks Insurance4.9156 Reviews
WebsiteView Page
1Reply
See this reply in the discussion

5 Replies

Jump to latestLatest
  • Rod HanksBusiness Member
    Insurance Agent · Dallas, TX · Member since 2013 · 743 posts · 462 votes
    4y
    Quote from @Rahul Gupta:

    Hello, 

    I am starting a project soon in a small town in IL, and looking for some help on where to buy the insurance that will cover the builders risk as well as the property itself in case of fire or flood. 

    I looked on steadily. com as well as spoke to a statefarm agent but i am not getting any clear answer on what will be the right type of insurance.

    Should I get the dwelling coverage based on the amount of investment I will do or the rebuild cost? I am not sure if it makes sense to get a coverage for 300k as a rebuild cost when my total investment will only be 80k with an ARV of 120k.

    Is there an online portal or an agent I can talk to who has the expertise tpo deal with fix and flip insurance in IL?

    Thank you for your time. 

    You need a builders risk policy for the finished value of the project. Builders risk will cover fire theft vandalism malicious mischief windstorm and hail storm damage but will not cover flood. If the property is in a flood plain you would need a flood policy. I’m licensed in IL and happy help.

    Rod Hanks Insurance4.9156 Reviews
    WebsiteView Page
    1Reply
  • Rahul Gupta
    OP
    Investor · Member since 2018 · 47 posts · 19 votes
    4y
    Quote from @Rod Hanks:
    Quote from @Rahul Gupta:

    Hello, 

    I am starting a project soon in a small town in IL, and looking for some help on where to buy the insurance that will cover the builders risk as well as the property itself in case of fire or flood. 

    I looked on steadily. com as well as spoke to a statefarm agent but i am not getting any clear answer on what will be the right type of insurance.

    Should I get the dwelling coverage based on the amount of investment I will do or the rebuild cost? I am not sure if it makes sense to get a coverage for 300k as a rebuild cost when my total investment will only be 80k with an ARV of 120k.

    Is there an online portal or an agent I can talk to who has the expertise tpo deal with fix and flip insurance in IL?

    Thank you for your time. 

    You need a builders risk policy for the finished value of the project. Builders risk will cover fire theft vandalism malicious mischief windstorm and hail storm damage but will not cover flood. If the property is in a flood plain you would need a flood policy. I’m licensed in IL and happy help.


     Thank you. I sent you a PM

    0Reply
  • Kevin Koone
    Insurance Agent · Maumelle, AR · Member since 2015 · 131 posts · 41 votes
    4y

    Rahul,

    You may have it covered by now I do most of my "flip" policies with Foremost.  That way you get your building/reno coverage and also liability on one policy.  Plus they'll month to month with you.  If it's just cosmetic it's a good fit.  If it's more serious, adding sqft, another story a more traditional BR policy would be the way to go!!

    Good luck!

    0Reply
  • Rahul Gupta
    OP
    Investor · Member since 2018 · 47 posts · 19 votes
    4y

    Thank you, Kevin! I will check with them

    0Reply
  • John Mocker
    Insurance Agent · Norwalk, CT · Member since 2016 · 2k+ posts · 1k+ votes
    4y

    if your renovation builders risk policy does not include liability coverage you should purchase this coverage.  You may also need Workers comp coverage depending on your state laws, how you are paying the workers, etc.

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free