A fix & flip must have?

[Michael L.]

What type of insurance do I need to have while doing a rehab on a flip? Or is that not necessary? Thanks BP fam💯✌🏻.

[John Mocker]

Michael,

The most common policy for a fix and flip is a Renovation Builders Risk policy.  It covers the existing structure and also the renovations/additions being done to the property.  It is runs from the start of the flip to the completion (Certificate of occupancy aka CO).  Depending on the company, you may be able to insure for a short time before and after the project.  Some Renovation Builders Risk policies include Liability, others do not (you would get a separate policy for that).  Generally you can buy those policies in 3 month, 6 month, and 1 year terms.  If the policy can be cancelled for a refund, I recommend going with the full year term.  If they cant be cancelled for a refund (fully earned), then one of the shorter terms may be better.

Occasionally we write a Vacant Dwelling policy endorsed to include renovation for these type of projects if the Renovation Builders Risk does not fit it.  If there is a long period before the project is to commence, you many need to do a vacant dwelling policy and then switch to a Renovation Builders Risk later.  Also, after the project gets it's CO, you will need to put it on a vacant dwelling policy if you are selling it or a Dwelling Fire policy if you are keeping it as a rental

I strongly recommend that you seek out an Independent Agent that represents many Insurance Companies.  As you can see, there is potentially 2-3 different policies you could need and one company may not be the best for all of them.  Look for an agent with experience in Construction/Real Estate projects.