Insurance question

[Tim Anderson]

Hi. I recently got my first rehab home under contract and am wondering what type of insurance I need to get on it. I've read 5 or 6 threads on it already on BP, but I was wondering more so about my specific situation. The home needs new HVAC, new plumbing, new carpet, paint and garage door. It also has a minor foundation issue. Purchase price ended up being 28.5, ARV roughly 100k, needs roughly 20k in rehab. Being my first rehab and not being a man of means, I don't have a ton of cash reserves to take on a ton of liability myself.

The thing is, I'll be having people in the home working on it, and when they're done I plan on visiting the house for a couple of hours almost every day. I live roughly 15 miles from the home. I don't know if this means it should be considered vacant or not, being that I'm not actually living in it, per se. I plan on hiring 'handymen', not licensed contractors, so I don't know if that would change my insurance options much or not. I'd prefer to pay monthly, being that I am new to 'the game', and really am not sure how quickly the home will sell. Any input would be greatly appreciated.

[J Scott]

If nobody is residing in the property (using it as a residence), it is considered "vacant".

You can get a builder's risk policy on a vacant property, but compared to a Landlord's Policy (for a rented house), they are pretty expensive (I've paid about $600/year for my properties when I've used them), and they don't cover a lot of things that are potential issues.

As far as contractors go, it doesn't matter if they are licensed or not (unless licenses are required for their specific trade); what matters more is whether they carry insurance or not. Preferably, you want your contractors to have both liability and workman's comp insurance; this will protect both them and YOU in case they get hurt on your job or screw something up that causes someone else to get hurt.

Personally, I don't let anyone on my job site without insurance, but that's just me. I would certainly recommend ensuring that anyone doing high risk work (on a ladder, using electricity, using power tools, etc) be insured to protect yourself.