Best Specialty Insurance for Vacant Properties?

[Cynthia Heaton]

My husband and I have purchased our first investment property and have no idea what we're doing. I've been trying to research insurance companies for property insurance only to be told that they cannot insure us because the property will be vacant. We are demoing at our own pace because we're doing it on our own, but I really need the property insured before we have crews move in to do renovations. Does anyone have any recommendations for companies that provide this kind of specialty insurance and what kind of coverage I should be seeking for the dwelling, personal liability and medical payments in the event that someone is injured while working on the property. 

[Ryan Ingram]

I'm sorry you're having difficulty with your insurance company; however, when it comes to real estate investors, not all insurance is created equal. 

For a structure that currently exists and you are rehabbing the property, I'd recommend getting a vacant policy that has a builder's risk endorsement. This covers the existing structure and the updates that are currently being completed. 

If it is a new construction build, I'd recommend getting a builder's risk policy. 

Both of these are easy to write and issue from the insurance companies side, it is just a matter of finding an insurance company that is appreciative of the real estate investing community. 

I have had a lot of success with Liberty Mutual on builders risk policies. 

For vacant policies that are also under construction, my favorite companies are (in no particular order) Tower Hill, Vacant Express, Hanover, Markel, and Berkshire Hathaway Homestate. 

When you are getting a vacant policy, the most important items that you make sure of are as follows: 

• Is this an actual cash value or replacement cost policy? 
• Is vandalism and malicious mischief covered? (Spray painting, breaking windows)
• Is theft covered? (stealing copper, hvac, etc.)
• What is the minimum earned premium?