All Forum Posts by: Jeremy Goodrich

@Sophia Berry, Congrats on all of this great forward progress!  Moving into the role of GC definitely means a more comprehensive insurance policy.  I agree with the comments above that you should find an insurance advisor that you trust and stick with her/his advice along the way.  What you need from an insurance perspective is the following:

- Builders Risk Policy - This coverage the building itself and the materials used to build it.  Builders Risk it property coverage specifically for houses being built

- GC General Liability - This covers you as the GC for bad things that could happen to other people along the way.  IMPORTANT - This will NOT replace the need for your contractors to have Workers Comp insurance for if they get hurt while building.  The relationship between the contractors Work Comp coverage and your General Liability coverage is a longer convo, but definitely require that all contractors have their own Work Comp.

- Property Owners General Liability - You're playing two roles.  One as he GC and the other as the property owner.  Just make sure your insurance addresses this.  Both can usually be covered on the same policy.

We take care of developers of all sizes so feel free to reach out if you have questions.  Happy to help!

Jeremy

Great post @Joseph Feldman!  It is amazing to see how many investors have completely incorrect policies.  

@Aaron Stalnaker's response looks perfect and is definitely the outline of Bloomington

Yep. Independent agent who specializes in REI. Super Bowl commercial companies won't be able to handle flips/vacants/renovations and you want someone who's truly on your team. Good luck on the reno!

@Boone Tyson - Our Shine Insurance youtube channel helps investors avoid insurance confusion and mistakes.  Would you be into telling this story as a interview?  Think it would help a lot of investors.  I'll DM you.

What's above is sort of correct.  All properties you insure need two basic coverages: Property & Liability.  It's usually together on a policy which makes it easier.  Builders Risk is a property coverage usually reserved for new construction.  If you get a Builders Risk policy just make sure it includes liability coverage and it is built for Reno not New construction.  What most flip policies are referred to is Vacant Reno.  This means is it's a policy that understands:

- The property is vacant

- There will be renovations going on

Ultimately, if you vet the agent and make sure they're an REI specialist they should have no problem getting you this coverage. Be prepared for it to be a solid 30% more expensive than a standard tenant occupied landlord policy.

@Stacie Katori - so sorry this happened on your first property.  Seems like there's a lot going on here.  If you'd like to chat, please feel free to reach out.  We navigate insurance companies all the time and speak the language.

A couple of thoughts though:

- You can and should navigate this through either your own company or the contractors company.  I can tell from the above if you've gone down both paths but if you haven't, you should.

- You should renew the policy with your current company.  If they try to cancel because of the fire damage, get your agent to advocate for you.  I'll call them if you like.  It's unfair when a company tries to cancel what a claim hasn't been completed and no other company is going to want to insure the fire damaged house.  The current company is by far the best option.

- You may be able to get lost income coverage.  It's going to be hard because you don't have comps from a previous year but it seems worth asking about.

- As for the numbers, if you have a Replacement Cost coverage policy, it ultimately should pay the cost to replace (up to the liit on your policy).  The Public Adjuster will help you with this part.

Feel free to reach out if you simply need to bounce things off someone.

Paul is a good guy.  He takes care of a lot of our clients and does a great job.

John & Patti shared the 3 most common ways to do it:

1. Builder Risk for property coverage with a separate General Liability policy 

2. Vacant Policy with Renovation coverage added (General Liability is usually included)

3.  Adding this property to an already existing commercial insurance policy that covers your entire portfolio.

Option 3 is the most seamless and usually the cheapest.  Generally you need a larger portfolio to get this kind of scenario going though.

Bottom line: Find a good independent insurance agent that specializes in real estate portfolios.  That combination is going to get you the best policy for the best price. 

Happy Flipping!

@Joe Donohue - be careful with American Modern.  Their policies can have a lot of ACV coverage built in and their pricing in Indy is high.  They aren't bad for some things, we have them in our agency, but most the time their the third or fourth best option.