Insurance advice needed on a flip property

[Nate Pucel]

Hi all,
I have a question about insurance on a flip.
I'm buying the house for 40k, putting approx. 35-40k in on the interior, and hope to sell for about 120-140k.  The term on my loan is 1yr.
This is my first flip and so I don't know much about the insurance I need.  I included screen grabs of the 2 different quote options I received.  Thoughts?  My initial thoughts are to choose the option that only covers 120, but maybe increase the premises liability to 1million.  However, I'm not sure.  Any insight would be greatly appreciated.  

Thanks!

[John Mocker]

Nate,
Based on what info you provided, I would insure the project either with a Renovation Builders Risk policy as Rod suggested (and a Liability policy if the Builders Risk did not include it) or with a Vacant Dwelling policy with Renovation.

With the Renovation Builders Risk you are insuring the existing structure and the renovations. Depending on the company, the existing structure could be valued at the Actual Cash Value (ACV) or the Replacement Cost (RC). ACV is the RC minus depreciation. It should be somewhere in the purchase price range minus the land value. The RC is the cost to rebuild from the foundation up with the same kind and quality.

Neither of those quotes appear to be a Builders Risk policy but they may be vacant dwelling policies. If so, you need to make sure they allow for the renovation work.