Hard money Builder's Risk Insurance

6 Replies

Hello everyone it's my first time doing a hard money loan on a flip im doint it in new Jersey state and my hard money lender asked me to get a Builder's Risk Insurance or Vacant Dwelling Under Construction Insurance

Anyone have recommendation as far which company have reasonable rates ?

Originally posted by @Ahmed Nijim :

Hello everyone it's my first time doing a hard money loan on a flip im doint it in new Jersey state and my hard money lender asked me to get a Builder's Risk Insurance or Vacant Dwelling Under Construction Insurance

Anyone have recommendation as far which company have reasonable rates ?

 Ahmed, I'll send you the company my flipping clients use.  The program is set up to handle both Vacant and Rehabs.

Ahmed,

There are several good companies we use in this area for the Builders Risks. Which is best for your project depend on the details. Some of those companies will only write a paid in full policy so you have to decide on 3 mos, 6 mos, a year for the term. However, there are others that will write a full year policy that will refund the unused portion of the policy if you finish in less than 12 mos. Those are the ones I preferred to use. Many will offer installments. The Builders risk only covers Property so you will need a Liability policy also.

Often, the vacant with renovation policies will have lesser coverage or more exclusions than a builder risk so you should carefully compare price and coverage to see what is better for your project.

If you are having difficulty locating markets for the project PM me and I will send you a list of companies that we use in the area for both types of policies. 

@Ahmed Nijim You definitely want to make sure you get the right insurance for your project because most insurance policies, even landlord policies, won't cover vacant properties. They can be a little more expensive in my experience, but they provide the correct coverage. I'm familiar with the policy that @Jason Bott is referring to and am sure that’s the type of policy that your lender is referring to.