Property Insurance

5 Replies

Hello BP

I recently purchased my 3rd rental property and this one was a shell which is getting a total rehab. I had to pay cash for the property because of my debt to income ratio. So me question is do I need any other insurance but renter policy which covers the structure? And do I need any other coverage during construction? i have never owned a property that was vacant.

Thanks

Ryan

@Ryan Mackfee  If you expect the property to be vacant more than 30 days, you probably need to have a vacant dwelling policy.  You need to read your policy to know what that period is with your insurer.  You may also need a builder's risk policy to cover materials that could get stolen if they get delivered and not installed quickly.  That's why you want "on time delivery" of materials when you expect them to be installed and avoid letting them sit around the job site. 

You need to have this conversation with your insurance provider ASAP.  The surprise may be on you if you have an incident and your insurer finds out you have a vacant dwelling.  You may have no coverage at all right now.

You can buy a builders risk policy which usually has a minimum premium of $500 or you can buy from a specialty insurance company that writes vacants while being rehabbed. It takes a specialty agent to write those types of policies.

@Donald Stevens  , can i have a contact, please?

and yes, technically you should have a "vacant policy" if the home can NOT be occupied immediately after closing. I even had an agent ask me to show a signed lease. i told them, "are you nuts? i have to fix it first".

anyway, those short term policies are usually 2-3 times more expensive per year than the "occupied" policies.

Originally posted by @Donald Stevens :

You can buy a builders risk policy which usually has a minimum premium of $500 or you can buy from a specialty insurance company that writes vacants while being rehabbed. It takes a specialty agent to write those types of policies.

 oh, i clicked on your signature and you are close to me. i assume you write policies for michigan? let's connect. i have two coming up!