Builders Risk Insurance

[Angelica Hughes]

Hello!  I am getting ready to close on my first investment property and came across having to purchase 2 types of insurance in order to close on my funding from a fix and flip Line of Credit product.  The bank required I have both homeowner's insurance as well as Builders Risk Insurance.  I'm sure this varies from state to state so if anyone in NJ can shed some light here I would appreciate it.  I just want to make sure that it is absolutely necessary to obtain both kinds of insurances.  Thank you!

[Andrew Kerr]

hi @Angelica Hughes - This seems weird. When I have done reno projects in the past, they only required Builder's Risk for flips or very distressed properties I was going to buy and hold. 

I am wondering if they are asking for both because part of the property will be occupied while the renovations are happening? Either way, I would talk with an insurance agent, I am not sure they would even write both policies as you would be double insured. I could be wrong.

Hopefully we can get an insurance agent to chime in.