Working on first flip- does this insurance sound reasonable?

[Ken Nyczaj]

Got my first property under contract recently and am starting to connect the pieces.

My insurance agent that I use for Home and Auto gave me the below information on insuring a single flip under an LLC:

I will have a package policy for liability and a builders risk policy. This package provides General Liability coverage for my LLC's contracting operations as well as that of its subcontractors. It also provides builders risk coverage for the property while under renovation.

Cost of package policy is $1,000 a year and builders risk is $573.

The agent recommended that we keep the package policy continually in place for when we purchase the next property, but the builders risk will be removed once renovations are completed and we will be reimbursed for however many months of premiums depending on how long it takes to renovate. Yearly premiums are being paid upfront at settlement for a total of $1573. So each month, no matter what we will be paying $83 a month towards insurance- is it just the cost of doing business?

Just curious on what prices are in Maryland or Annapolis or Baltimore with other insurance companies. I'm using Eerie Insurance. 

[Ned Carey]

Perhaps I am foolish but I have only ever bought builders risk when doing renovations. I have not bought any other type of coverage at the same time. I am certainly no expert in insurance but I haven't heard of an arrangement like you describe.  I thought that was why you get builders risk in the first place.  

The price for builders risk alone seams low for a year. In fact at that price is seems a little low for 6 months. I would get another quote just to compare. You might try Steve Luray  http://lurayinsurance.com/  He regularly deal with investors and is very familiar with their needs. He is a regular at the local investment clubs.