Help Binding Insurance Policy

[Alecia Loveless]

I am 6 days from closing on a new SFR and am having trouble getting insurance on it. This property requires renovations, and due to the location I am estimating I will need 60 days to finish the project. Contractors are in high demand and my personal contractor is finishing up a prior project for me, but this deal was too good to pass up.

So far I have been told by three insurance companies they do not handle rentals. I have had one company say they will give me 30 days to do renovations and get the new roof completed as well as get a new tenant in, which is not likely to be viable, but I am keeping in my back pocket as a last resort.

The newest company I heard from today said they would give me a vacant building policy for $1825 for 12 months that I can cancel at any time once the renovation is complete and shop for a new policy that is for a rental at a better price, the agent apologized for the high price, he understood that an investor would not be happy with that quote. However, the agent was trying to give me the flexibility to finish the project without a stringent time frame and still have proper coverage.

Does anyone have any recommendations?

Thanks!
Alecia

[David M.]

@Alecia Loveless

Are you talking with the regular big name chains of insurance providers?  What about some insurance brokers in your state / market?  If you are still renovating it, you should be able to get a builder's risk policy.  A vacant building policy shouldn't apply if you are still renovating it.

[Alecia Loveless]

Thanks David. Hadn’t heard of this type of policy yet as I am new. 
Alecia

[Ben Guttman]

@Alecia Loveless where are you located. Definitely some great regional carriers with flexibility on this. Also, builders risk is a good option

[Jeremy Goodrich]

You need to connect with an independent insurance agent that specializes in investment properties.  The right insurance for this scenario is a vacant policy with renovations coverage added.  A good agent should be able to get you a quote for this no problem.

 The term "builders risk" is misused a lot. Builders Risk coverage includes:

1. Property coverage for the building materials 

2. Liability coverage for the fact the contractors will be on site

If a property is a new build, the entire policy can be builders risk.  In a renovation, the builders risk is just one small part of the entire policy.   

DM me if you'd like a suggestion for a good independent insurance agent that serves New Hampshire.  You can just google "real estate investors insurance New Hampshire" as well.  

[Wayne Brooks]

We use a renovation Builders Risk policy. 

[Alecia Loveless]

Thank you for letting me know this!  I will definitely look for this type of policy in the future. I was able to find a small company to work with and a policy that made sense that was way below the original $1825 I had mentioned. I believe the insurance agents that deal with investors just smelled blood with me as I did not know better. Glad I found one that was at least a bit better to deal with!

[John Mocker]

Alecia
Glad you found a company that worked for you. I would suggest you get in writing from the company and agent that they are aware of the renovations.

Also, you need to find out if there is a Vacancy clause and when it kicks in. Usually after 60 days the vacancy clause can reduce coverage in several areas (vandalism, theft, water damage, ...) that are important during the renovation and beyond.