All Forum Posts by: Michael L.

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.  

If you are going with a HML or PML loan some lenders require specific coverages. General liability and builders risk are usually required. If you are going that route always check with the lender upfront so you don't have to deal with it at the finish line.

Hire an insurance broker. I typically use US Assure or Liberty Mutual for Builders risk policies during renovation. 

 Builders Risk

@Michael L. Tower Hill Insurance for every flip and rental we have here in Florida, at least 10 policies in the past 2 years. They’re competitive and will ensure just about anything.

You MUST have dwelling.  I had a fix and flip burn down because of a swatter.  Even with insurance on the property its been a hassle to get the insurance company to pay.  It only takes ONE time.  I would recommend liability, just in case.  

You definitely want to obtain dwelling and liability.  Typically you can get those coverages through one policy but some investors have a separate blanket liability policy and each property is added/subtracted as you buy/sell. For rehabs, get builder's risk (all perils).  

Builders Risk.