House Flipping Insurance

Learn what type of insurance coverage you need to protect your rehab projects When Flipping Houses.

House Flipping Insurance

How to Flip Houses / House Flipping Insurance
Disclaimer
This article does not constitute insurance, legal or investment advice.  This article was created for informational and educational purposes only to provide general information on the available insurance options that could be utilized for your properties.  We recommend consulting with professional, licensed insurance companies to ensure you have the appropriate coverage for your properties.

Overview

Flipping Houses requires a special type of insurance coverage that a typical Home Owner's Insurance policy does not provide.  In this lesson, we will discuss what types of insurance coverage you need for your rehab projects, how much it should costs & where to get coverage.
House Flipper
FAQ
Do I need insurance for my house flip project?
FlipperForce House Flipping Software Founder Head Shot
Reality check
Yes, insurance protects you and your property from all kinds of perils and liabilities that can happen during your rehab.

Your house could burn down, a worker could fall off of a ladder, your property could be vandalized or tools & materials could be stolen.

The insurance polices discussed below will protect your property and personal assets and provide peace of mind.
House Flipper
FAQ
Okay, so what type of insurance coverage should i purchase for my house flip?
Flipping houses requires special insurance coverage that your traditional homeowner's insurance policy will not cover.

Your traditional insurance provider that you use for your personal residence or auto, will likely not provide the type of policy you need.  Most traditional insurance companies and homeowner's policies  are not designed to protect vacant properties or properties that are needing rehab.

For this reason, when flipping houses you will need to consider 3 Special Types of Insurances:
  1. Vacant Building Policy
  2. Builder's Risk Policy
  3. General Liability Umbrella

Vacant Building Policy

A Vacant Building insurance policy for vacant buildings, meaning no one is living in the property.  For insurers, vacant properties are considered a higher risk, because they are more prone to arson, theft of copper plumbing, vandals and water damage.

Builder's Risk Policy

A Builder's Risk insurance policy covers the renovation portion of the property including materials, fixtures and equipment used in the renovation of the property.  A Vacant Policy may not cover the renovation portion or materials so it's important to consider adding a 'Builder's Risk rider' to your policy.

General Liability Umbrella Policy

A General Liability Umbrella policy will cover any risks above and beyond the your property insurance coverages.  A General Liability Umbrella provides 'umbrella protection' for your entire business in the event of major lawsuit, claim or catastrophic loss.  If you have a high net worth & assets you can be a target for litigation, so a General Liability Umbrella Policy can provide protection & peace of mind for your assets.  

When in doubt, tell your Insurance Provider your business intentions so they can craft a policy that will properly protect you, your property & your assets.
House Flipper
FAQ
How much should an insurance policy cost?
As a general rule of thumb, your Vacant Insurance policy with Builder's Risk rider should be around 1% of the property value per month.

​So for example, a $200,000 policy would cost around $200 per month.

A General Liability Umbrella policy is actually quite affordable.  You should be able to get $1mm worth of coverage for only a few hundred dollars.
REI Guard House Flipping Insurance

REI Guard

​REI Guard offered by the National Real Estate Insurance Group is developed specifically for residential real estate investment properties including rehabs & rental properties.  REI Guard provides:
  • Occupied, Vacant & Renovation Policy Coverages
  • Named Perils (fire, explosion, windstorm, etc.)
  • Vandalism & Malicious Mischief
  • Liability Coverage
Foremost House Flipping Insurance

Foremost Insurance Group

Foremost Insurance Group provides competitive rates for  Vacant Home Insurance Policies:
  • Occupied, Vacant & Renovation Policy Coverages
  • Named Perils (fire, explosion, windstorm, etc.)
  • Vandalism & Malicious Mischief
  • Liability Coverage
NEXT: BENEFITS OF FLIPPING HOUSES

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