House insurance for flips

[Debora Stiff]

Any recommendations on insurance companies that provide reasonable rates for flips while in the renovation stage? Area - Virginia

[Ryan Ingram]

Hey Debora!

I've found these companies to be incredible at vacant policies...and they are also licensed in VA (I'm not...yet...otherwise I'd offer to help :)) 

Vacant Express- they only offer basic coverage (DP1) and available in 3, 6 and 12 month policy terms. They have to be paid in full. The property value is "agreed" and if the property was acquired in the past 12 months, the coverage is the purchase price plus the estimated rehab cost. For example: $100,000 purchase price + $30,000 estimated rehab= Coverage A of $130,000. So, this is not based off the ARV, and from my understanding, this isn't negotiable. I could be wrong, I'd recommend looking up a local agent to answer the question. You can do that here. The coolest thing I like about Vacant Express is they automatically include vandalism and malicious mischief (VMM for short) on all of their policies. This is the main reason vacant policies are so expensive, is because they are much more likely to get vandalized, broken into, stolen from, and they aren't usually checked on as frequently. So, if you're able to find a vacant policy reasonably priced that includes this...it is generally a winner. 

American Modern- They are also a good choice. You can find out more about their program on their website here. The also offer the 3, 6, and 12 month policy term. American Modern has a really cool 10+ program that you can schedule all of your properties on. You also have the ability to toggle properties back and forth between vacant and occupied...for when the tenant that has done serious damage moves out and it will take longer than 30 days to complete the rehab. 

Markel is also a good choice. Details on their product can be found at their website here. Markel is pretty solid with insuring higher valued properties that are vacant. I could be mistaken, but I believe they also provide vacant policy coverage on Special from. 

Basic (DP1), Broad (DP2), and Special (DP3) forms sound silly, but they are pretty straight forward. Here is a link to a comparison chart I often send my clients. In a nutshell, basic and broad form policies are named peril (fancy word for cause of loss like ). Which means, in order for the claim to be covered, the policy has to specifically include that type of loss (fire, windstorm, etc.). Special form is an open peril policy. This means that everything is covered unless it is specifically excluded. 

Hope this helps! Let me know if you have any questions about this...I'd be more than happy to help.